A 49 percent minority stake in a Park Avenue trophy tower is up for grabs as its owners begin seeking a new equity partner and recapitalization of the building to roughly $1.4 billion.
The 1.25-million-square-foot 237 Park Ave. is owned by Scott Rechler’s RXR Realty and Walton Street Capital, which is selling its stake. Sources said that while Rechler and his investors like to remain in their deals, they could be somewhat flexible.
The 21-story building is also known as Park Avenue Atrium for its central glass atrium that brings light into the interior of the large floor plates.
With a full occupancy, a “beauty contest” among the brokerages led to the hiring of the newly reinvigorated Cushman & Wakefield capital markets team led by Douglas Harmon and Adam Spies.
This is the same C&W team that recently won the coveted assignment to sell the nearby Pfizer buildings and relocate the company’s headquarters.
The C&W team is also finding an equity investor for SL Green Realty Corp. at 1515 Broadway, a 1.9 million-square-foot tower leased to Viacom that is expected to be recapitalized at $2 billion. A 4,629-square-foot deal with Korean retailer Line Friends, represented by RKF, was recently completed at that Times Square tower, which previously hosted Line Friends — known for its cartoon characters — as a pop-up.
Harmon also led the recapitalization of 10 Hudson Yards for $2.2 billion last year prior to joining C&W.
The original six-story 237 Park was designed by Warren & Wetmore in 1905 and increased to 16 stories in 1935. A redesign in 1981 by the office of Edward Durell Stone and Emery Roth & Sons brought it to today’s 21-stories.
Its then-developers, Olympia & York, together with Edward J. Minskoff and Abraham Fruchthandler’s Fame Associates, filed a deed restriction limiting its size but it was superseded by later zoning. Any new Midtown East rezoning could also grant it more air rights to use or redeploy.
In May 2007, Broadway REIT paid Beacon Capital $1,215,695,000. Rechler. The Walton Street fund bought it from the ashes of the Lehman Bros. bankruptcy in October 2013 for a then-bargain of $810 million.
They quickly hired Dan Shannon of MdeAS Architects to design renovations and proceeded to add nearly $100 million in capital and tenant leasing improvements — including sleek stone, glass and wood upgrades of the elevators, lobby and storefronts that complement its curtain walls’ alternating ribbons of granite and glass.
The building was previously known as 466 Lexington, where there is another grand entry. The now renovated pedestrian-only Depew Place Plaza separates it from the Helmsley Building to its west.
New York Presbyterian is signing a long-term not-for-profit condo deal for 500,000 square feet in the coming weeks, bringing it to 98 percent occupancy, sources said. Asking rents are in the $80s per square foot.
The deal is expected to be widely marketed and, while Rechler is now likely to remain as manager with a majority stake,
Walton will sell and redeploy its expected riches. None of the parties returned requests for comment prior to deadline.
