New York City office
and retail Market Research

September 2016

September 2016 » Market Analysis » NYC Buildings For Sale

September 2016 New York Buildings For Sale

Buildings For Sale:

Kevin Maloney’s Property Markets Group is looking to sell a newly built and still empty rental tower in Long Island City. PMG built the 45-story, 391-unit tower at 23-01 42nd Road in partnership with Vector Group and toyed with the possibility of turning the units into condominiums, filing a $364.2 million condo plan. Leasing at the tower is set to begin next week, with average asking rents of $62 per square foot. Since the building’s condo plan was approved, a potential buyer could opt to sell the units instead of renting them out.

PMG and partner Hakim Organization are looking to sell a nearby development site at 29-37 41st Avenue, which they paid $133 million to assemble.

Paramount Group and Morgan Stanley are shopping a majority stake in downtown office tower 60 Wall Street. The passive stake in the 1.6-million-square-foot trophy office tower could go for $750 per square foot. Tenant Deutsche Bank, which leases the building under a 2007 sale-leaseback deal with Paramount and Morgan Stanley that’s worth $1.2 billion, has six years left on its lease. Paramount currently owns 62.3% of the tower and would sell part of its interest, though remain a general partner. Morgan Stanley, through its Real Estate Special Situations Fund III, would sell its entire 37.7% stake. The bank is currently in the market for 1 million square feet of space as it considers whether to stay or move when its lease expires. The tower’s net operating income will be $66 million this year, or $41 per square foot. Its tax assessments will top $20.5 million or $12 per square foot.

The Park Hyatt in Midtown’s luxury tower One57 is one of more than 30 New York City hotels currently for sale. The spike comes as observers stress about the near-term strength of the hotel market amid declining hospitality revenues and volatility in the financial markets. The Park Hyatt New York, a 210-key five-star hotel which sits on the lower levels of Extell Development’s One57. Last year, trophy deals like the $1.95 billion sale of the Waldorf Astoria hotel to Chinese insurer Anbang and the $805 million sale of the Palace hotel to Korea’s Lotte Group pushed total hotel sales volume to $6.6 billion, more than double the previous high of $3.1 billion reached in 2011.

Buildings Sold:

SL Green Realty sold a 40% stake in the office tower at 11 Madison Avenue to Prudential's real estate subsidiary for $480 million. The deal values the tower at $2.6 billion including lease-stipulated improvements, the same price SL Green paid when it bought the tower from the Sapir Organization and the CIM Group last year.

Taconic Investment Partners is in contract to buy a 14-story, 114,000-square-foot office building at 817-819 Broadway in Greenwich Village for $90 to 110 million. It is a fully occupied Class B building.

The Girl Scouts of America is in contract to sell part of its headquarters at 420 Fifth Avenue to the Wasserman family’s AM Property Holding Corp and Quality Capital USA for $61.3 million. The Girl Scouts organization bought the office and retail condos at 420 Fifth Avenue in 1991 for $24 million. The organization is currently in contract to sell the 14th through the 17th floors, which span 71,960 square feet.

Midwood Investment and Development picked up the 20,000-square-foot retail portion of 85 North 3rd Street in Williamsburg for nearly $42 million in an off-market deal.

Chinese financial services firm China Orient Asset Management Corp. paid $143 million to buy a majority stake in four Flatiron office buildings controlled by the Kaufman Organization. It is reported that China Orient invested about $60 million of equity in the buildings, part of the former Ring Brothers portfolio that Kaufman controls under a 99-year lease. The asset manager also took out debt on properties, which brings the total purchase price to $143 million. China Orient bought out Kaufman’s previous partner, the Iowa-based Principal Real Estate Investors, which had planned to exit the properties once they started to become stabilized. Kaufman retains a small stake in the buildings and will continue to manage them. The landlord and its original partner acquired 99-year ground leases on from Extell Development in 2014 on the four properties: 19 West 24th Street, 13 West 27th Street, 45 West 27th Street and 119-125 West 24th Street. The buildings, spanning a combined 341,000 square feet. Kaufman and Principal planned to spend $34 million into upgrading and modernizing the buildings.

Slate Property Group agreed to sell its stake in the Bedford-Union Armory development in Crown Heights to BFC Partners amid pressure from City Hall. Slate bought the Lower East Side nursing home earlier this year after the city lifted a deed restriction on the property. City Hall alleges that the company misled it by keeping its plans to convert the building into condos. BFC and Slate planned to turn the Bedford Armory building into 300 apartments, 12 townhouses and a sports center. Half of the apartments will be affordable.

System Property Development paid $30.1 million for retail condominiums and a parking garage at 866 United Nations Plaza. For the building’s three first-floor retail units in the building for $12.6 million and the garage for $17.5 million. The units collectively span 10,842 square feet, and the garage is 41,482 square feet.

So far this year, the largest closed multifamily deal is Savoy Park, which Fairstead Capital purchased for $315 million. Other large pending multifamily deals include Rockpoint Group’s purchase of 63 and 67 Wall Street for $430 million and Isaac Kassirer’s purchase of the Dawnay Day portfolio for $350 million.

Stellar Management has bought out former partner the Rockpoint Group and brought in a new investor at One Soho Square in a deal that values the office-and-retail project at $650 million. Stellar purchased Rockpoint’s 25% interest in the 750,000-square-foot project, giving the Boston-based firm $260 million for its interest. Imperium Capital is also a minority partner in the project, which is comprised of two neighboring buildings at 223 Spring Street and 161 Sixth Avenue.

Kevin Hoo’s Cove Property Group and hedge fund the Baupost Group are in contract to buy 441 Ninth Avenue for $330 million. The seller, insurance firm Emblem Health, currently occupies the entire 423,000-square-foot building but is set to move out within a year. Emblem Health’s predecessor Group Health bought the former warehouse, located between West 34th and 35th streets, in 1994 for $30.7 million.

Jack Terzi of JTRE Holdings is in contract to acquire 23 Wall Street in the Financial District for an undisclosed price. Chinese oil company China Sonangol had bought the six-story landmarked former JPMorgan headquarters from Africa Israel for $150 million in 2008. The property includes space in neighboring 15 Broad Street and 33 Wall Street and totals 160,000 square feet.
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