The 10 Biggest Investment Sales In New York City This Year
As far as the billionaire's playground of the New York City investment sales market goes, 2019 has been pretty lackluster.
The year is on pace to see $28B in trades, according to Avison Young figures released last month. That would make it the lowest sales volume in the city since 2010. Sales have been sliding since the market peak of 2015, and commercial real estate players say new rent reform legislation that came into effect this summer has slowed the market even more.
But there are still buildings trading, and some fairly blockbuster deals at that. Here is a look at the 10 priciest sales so far this year, according to data from CBRE and Avison Young.
30 Hudson Yards Office Condominium
Buyer: Related and Allianz
Leading investment sales this year so far is Related’s reclaiming of a massive office condominium at the 30 Hudson Yards tower. Reports that WarnerMedia — which bought the 1.4M SF condo back in 2014 when it was Time Warner, before AT&T's acquisition — was planning to sell emerged back in January, and Related was revealed as the winning bidder in April.
In June, German Insurer Allianz SE announced it was paying $384M for a 49% equity interest stake in the condo. The companies partially funded the purchase, which came to $2.16B, per CBRE, with a $1.43B CMBS loan from Deutsche Bank, Wells Fargo — which owns a 500K SF condo in the building — and Goldman Sachs, according to Commercial Observer.
WarnerMedia is leasing back the space from Related after its predecessor, along with Wells Fargo and KKR, purchased its office space to help fund the 2.6M SF tower's construction.
424 Fifth Ave.
Buyer: WeWork Property Investors
Seller: Hudson's Bay Co.
In February, the end for one of the city’s best-known retail properties finally arrived. After more than a year, WeWork Property Investors — which is jointly controlled by WeWork parent The We Company and Rhône Capital — closed on the purchase of the Lord & Taylor building on Fifth Avenue for $850M from Hudson's Bay Co., Lord & Taylor's parent company.
The coworking giant, currently gearing up for its initial public offering, paid $850M for the property, and vowed to “bring new life” to the building. The store had closed a month earlier.
The coworking firm’s chief architect, Bjarke Ingels, is leading the redesign of the 650K SF building, which has been slated to serve as WeWork's global headquarters. But in the past few weeks, reports that Amazon is eying the building have come to light.
The tech giant — hunting for more office space after dropping its Long Island City HQ2 plans six months ago — is reportedly weighing a lease for as much as the entire building.
450 West 15th St.
Buyer: Alphabet Inc.
After its 2018 blockbuster deal for the Chelsea Market, Google is again snapping up properties in Chelsea. The tech giant acquired the Milk Building at 450 West 15th St. from Jamestown in May, paying $591.8M, according to public records. The building connects to Chelsea Market, which Google bought for $2.4B last year, via skybridge.
“This purchase will help us meet our short-term growth needs in Chelsea-Meatpacking," William Floyd, Google's director of external affairs, told Crain's New York Business when the deal became public. "We are excited by this investment and are committed to continuing to contribute to the vibrancy of this amazing neighborhood."
885 Second Ave.
Buyer: Rockpoint Group
Seller: Ruben Cos.
In January, Rockpoint Group closed on its deal to buy One Dag Hammarskjöld Plaza, a 49-story tower at 885 Second Ave. The sale marks the first time the property has traded since it was designed by Emery Roth and developed by Lawrence Ruben in the 1970s, according to the New York Post, which first reported the contract last year.
The final price was $565.7M, according to public records. Cushman & Wakefield’s Douglas Harmon, Adam Spies and Kevin Donner marketed the building.
237 Park Ave. (40% partial leasehold)
Buyer: David Werner
Seller: RXR Realty and Walton Street Capital
In March, David Werner and a syndicate of investors paid $500M for a 40% stake in RXR Realty and Walton Street Capital’s 237 Park Ave, according to data from CBRE. RXR and Walton paid $800M for the property in 2013, per The Real Deal, which first reported news of the deal back in January.
The sale valued the building at $1.25B, according to TRD. Spies and Harmon of Cushman & Wakefield also represented these sellers.
850 Third Ave.
Buyer: Chetrit Family
Seller: HNA Group and MHP Real Estate Services
Jacob Chetrit and his sons, Michael and Simon, picked up 850 Third Ave. from HNA Group back in January, paying a total of $422M, according sources and public records. MHP Real Estate Services and ATCO Properties & Management, both minority owners in 850 Third, also sold their stakes in the building.
HNA, in the midst of a North American shopping spree in 2016, had paid $463M for the property. MHP Senior Managing Director Esther Zar represented all sides in the sale.
119 West 56th St.
Buyer: GFI Capital Resources Group and Elliott Management Corp.
Seller: Estate of Jack Parker
Allen Gross’s GFI Capital, best known for the ACE and NoMad Hotels, joined with hedge fund and activist investor Elliott Management to buy the Parker New York hotel in January.
The duo plans to spend $100M revamping the 729-room hotel, the Wall Street Journal reported, converting some of the rooms to private condominiums. Bank OZK provided $350M for the sale, according to Commercial Observer.
521 Fifth Ave.
Seller: SL Green and LaSalle
Savanna continued its Manhattan property binge this year when it reached a deal in March to buy the 499K SF office and retail building at 521 Fifth Ave. from SL Green, Quantum Global Real Estate and LaSalle Investment Management.
SL Green announced the sale in a release in March, saying the gross sales price for the property was $381M, and that it would generate net cash proceeds to SL Green of approximately $100M.
SL Green said it owned 50.5% interest in the joint venture, and Deutsche Bank loaned $242M for the sale, Commercial Observer reported. The final price, according to property records, was $379.3M. CBRE’s Darcy Stacom, David Fowler and Doug Middleton represented the sellers.
540 Madison Ave.
Buyer: Divco West
Seller: Boston Properties and partners
San Francisco-based DivcoWest paid $310.3M for the 36-story office building at 540 Madison Ave. last month. The deal worked out to be more than $1,050 per square foot, according to The Real Deal, which first reported the sale.
Boston Properties was the seller of the Midtown tower, which it owned for 11 years in a partnership with the Kuwait Investment Authority and a Qatar sovereign wealth fund. It bought the building from Harry Macklowe.
“DivcoWest has big plans for the building,” CBRE broker Bill Shanahan, who brokered the sale with Darcy Stacom, told Real Estate Weekly last month. “They want to add some great amenities and continue the strong history of leasing at the building.”
460 West 34th St. (66.3% stake)
Buyer: SL Green
Seller: The Kaufman Organization
In what has been viewed as yet another tick of approval for Manhattan's Far West Side, SL Green agreed late last year to acquire a majority stake at 460 West 34th St. The firm paid $291.7M for a 66.3% stake in the building from the Kaufman Organization, according to CBRE.
The deal valued the building at $440M, according to a Wall Street Journal report last year. In April, First Republic Bank agreed to lease 212K SF in the property, which was previously known as the Master Printers Building. SL Green plans to create a new building entrance, new elevators and the “activation” of roof setback terraces.