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In a diss to the city’s brokerage community, two office buildings are being marketed for sale by their owners — although one seller allowed brokers to bring in potential buyers willing to pay their fees.
The 520,000-square-foot downtown property at 180 Water St. is being pitched to buyers for $180 million. It may be entirely vacant by 2015, when the city’s Human Resources Administration consolidates to 4 World Trade Center, although the city could also exercise an option and move in other agencies through 2023.
The other building is the 110,000-square-foot 45 E. 53rd St., which was developed and owned by Banco Santander.
Multiple sources said bank execs are close to picking a winner after having quietly marketed the building to its own clients.
Eastdil Secured, Jones Lang LaSalle, Goldman Sachs and other brokerages were also allowed to bring in potential buyers that would pay their brokerage fees.
Sources said more than 40 buyers registered, including Savanna Partners and Aby Rosen’s RFR Realty, working toward a possible deal at $120 million, or $1,090 a foot.
But the prospect of a vacant, single-tenant building with no retail was rebuffed by many locals. As a result, the Spanish bank is targeting primarily investment clients such as high-net-worth South Americans.
In the latest scheme, the bank would sell its building and then lease it back for 10, 15 or 20 years at a price and a rent that would provide the new owner with a 5 percent return — with the bank able to buy it back after 10 years.
The 20-story 45 E. 53rd St. peers over the low-rise portion of the neighboring Lever House, thereby providing it with a Park Avenue presence.
Completed in 1991, the post-modern tower has a giant steel “O” nestled over the top of its green glass façade.
Designed by RBSD Architects, it was built on land purchased from an entity of Unilever, the developer and then owner of Lever House.
Bank officials, Savanna, Rosen, Goldman Sachs, Eastdil and Jones Lang LaSalle all declined to comment.
Downtown, the building at 180 Water was constructed in 1971 and was known as 130 John St. In May 1995, brothers Leon and Alfons Melohn, along with investors, bought the ground for $6.7662 million and the lease for an undisclosed price from Prudential Real Estate.
By 1997, the 24-story office building was entirely leased to HRA in a 20-year deal valued at $200 million. The building is zoned for 21,000 square feet of retail space, which HRA now occupies as a job center.
Now, the Melohns want to get an aggressive $180 million for the building, or about $360 a foot, for what could be a vacant property if the city ends its lease.
Meanwhile, other tenants are starting to line up. Barry Goldberg, general counsel of Melohn Properties, said, “We’ve had a fair amount of interest in this, and the building is very well maintained. The city hasn’t officially notified us, and they have the flexibility to put another tenant in there.”
The city has the right to terminate in 2015, or extend the lease from 2018 to 2023.
“The rent escalates, and if they renew, it would be at fair market value,” said Goldberg. “There’s a lot of flexibility for retenanting the space, and we have had inquiries for several blocks of space.”
While they haven’t formally notified the Melohns, HRA will be moving employees now located in a total of 745,000 square feet at 180 Water St., 2 Washington St. and 250 Church St. to 582,000 square feet at Silverstein Properties’ 4 World Trade Center, where the rent will be $56.50 per square foot.
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SK Development has purchased the stalled 8-12 Bond St. development site on the northeast corner of Lafayette from Frank Shahery and Ben Soleimani, who wanted to develop the small Bond Noho Hotel.
SK’s Scott Shnay and his father Abram were previously partners with Charles Blaichman and Shawn Carter, aka Jay-Z, on the derailed J Hotel site in Chelsea that was recently purchased by Albanese Development for an office building.
No one would comment on future plans for the Bond Street site.
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Lebanon, NH-based work clothes outfitters HW Carter & Sons General Store has signed a lease for 2,400 raw industrial square feet at 127 N. Sixth St. in Williamsburg.
The tenant was represented for its first-ever store by Joseph Sitt’s Thor High Street Advisors. The building owner was represented by Robert Gitto of Reliant Realty. Retail asking rents in this area of Williamsburg are around $50 a square foot.
