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Unizo Gearing Up To Take A Loss On Manhattan Office Building

321 West 44th St.

Japanese investor Unizo Holdings is reportedly expecting to sell a Times Square office building for about $15M less than what it paid to acquire it three years ago.

East End Capital and Related are competing to buy the 180K SF office building at 321 West 44th St., for $150M, Crain’s New York Business reports. Unizo paid $165M for the building in 2015. East End has a right of first refusal to match Related’s offer, a source told Crain’s.

If it does sell at a loss, it will be the second time Unizo has taken a hit on a New York City property. It has just reached an agreement to sell 370 Lexington Ave. for $190M to Broad Street Development, which is $57M less than what it paid in 2015.

It is also shopping 440 Ninth Ave., another office building it bought it 2013, for $290M, which is around $40M more than what it paid for it. It is negotiating to sell that property to TH Real Estate and Taconic.

In total, the investor is set to lose $30M on the three buildings, Crain's reports. With Chinese investors now withdrawing from the United States commercial real estate market, many have suggested Japanese buyers will step in to pick up the slack.

Offshore capital, however, is starting to be directed away from prime real estate markets, like the Manhattan office sector, and toward secondary and tertiary areas. Experts have said those foreign investors, chasing better yield, will now look beyond gateway cities. Unizo's string of losses could be considered a cautionary tale to reinforce that trend.