A slow but steady diet of apartment buildings, hotels and office towers have kept investors and brokers trading paper with sellers who are not always sure where to reinvest.
Eastern Consolidated’s chairman, Peter Hauspurg, quipped, “It smells like 2006” — a time when the sales market was exuberant and prices were rising quickly.
Office buildings have been the star performers as those that purchased then can now sell for more. The Ernst & Young tower at 5 Times Square was marketed by Douglas Harmon and Adam Spies of Eastdil Secured, and is now being sold to David Werner for $1.55 billion. AVR Realty paid $1.3 billion in 2006.
The Canadian company Oxford Properties, a partner with Related Companies at Hudson Yards, is purchasing 450 Park Ave. for $575 million from Somerset Partners and Michael Tabor. Somerset paid $509 million in 2007 and both the 450 sales were marketed by Eastdil.
Related also bought Time Warner’s office condo through Eastdil for $1.31 billion as the entertainment giant will move to its Hudson Yards.
Foreigners like Tabor (a Brit), Oxford and Ivanhoe Cambridge bought stakes in towers where owners wanted to unlock capital.
“There is not enough office product, and that continues to be the case,” said Nat Rockett of Cushman & Wakefield, which is selling a site at 45 Broad St. and representing the MTA in the sale of its headquarters at 347 Madison, which was stymied when the Midtown East Rezoning stalled. Rockett declined to comment on those transactions.
Many investors seek the Holy Grail of an off-market deal.
“We hope to get deals through relationships,” explained Nicholas Bienstock, managing partner of Savanna. “Everyone is a reluctant seller. We look for properties where we can add-value with a substantial upgrade.” Bienstock looks at just a handful of deals a year. One that paid off was the purchase and upgrade of 245-249 W. 17th St., now rented to Twitter and Room & Board.
In Midtown South, the United Charities Building at 287 Park Ave. South will be sold fully vacant, said Geoffrey Newman of Newmark Grubb Knight Frank. Because of its Gramercy Park location and condo pricing, the likely buyers will be converters. A condo/hotel, multi-star hotel or office redevelopment is possible as area office rents are now higher.
Several luxury apartment buildings with market-rate tenants are on the market with an eye on conversion to condos. These include the Post Toscana at 389 E. 89th St., the Post Luminaria at 385 First Ave. and Tribeca Park in Battery Park City — all being sold through investment brokers Harmon and Spies at Eastdil Secured.
Another Battery Park City residential building, the towering 42-story Tribeca Pointe, is also being marketed as a possible condo conversion through Woody Heller of Studley.
Darcy Stacom and Bill Shanahan of CBRE are showing the 1.1 million-square-foot Bank of New York Mellon historic office building at 1 Wall St. as a conversion that will be delivered vacant.
In the Cooper Square area, Andrew Scandalios of HFF is marketing Avalon Chrystie Place, which includes Whole Foods.
Sam Schneider, managing partner of Imperium Capital, has been purchasing retail condos — including 40 Mercer St. from Savanna last year — and is buying in Williamsburg. Here they can backfill retail and upgrade vacant apartments and common areas to get higher rents.
Ashkenazy Acquisitions Corporation, which owns Barney’s on Madison Avenue, is also an active buyer. President Michael Alpert said, “We’re actively looking downtown for offices and or retail and in Brooklyn. There is not a question of this being an active market.”
