GOOGLE EFFECT

Taconic Investment Partners co-CEO Paul Pariser was at YMWREA’s monthly University Club luncheon yesterday to talk about his rise from one of Jones Lang Wootton’s first US-based employees to owner of a firm that's acquired, redeveloped, and repositioned over 12M SF of commercial space and 3,000 units of luxury and workforce housing. But most people wanted to hear about the deal that rocked the end of ’10—Taconic, Jamestown, and theNew York State Common Retirement Fund's sale of the 2.9M SF111 Eighth Avenue to tech giant Google for $1.8B. Why wouldn’t Google want to control its own space, given it was the tenant’s vision to be there for the long-term, he says.
Not bad for an investment where people told Paul and partnerCharles Bendit, “You’ll never break $20/SF.” The building had reached $71/SF with Lifetime Network’s lease, says Paul (with The Durst Org’s Brandl Frey and Cushman & Wakefield’s David Berke), and rents with telecom tenants can reach as high as $80 to $100/SF “because they never move.” Now Taconic is managing the building for Google—the real reason he and Charles formed Taconic, he says, to get out of working for others and instead work for themselves. Overall, he’s extremely bullish on the NYC investment market, even though he just sold the building. Now’s a good time to play in the cityby buying, adding value, mining it, and moving on, he says, warning that there’s a higher likelihood that buildings will be worth more than less over the next few years.

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