The Real Deal New York

GEMS school looks to lease entire office portion of Plaza District property

Princeton International-led group paid $170M for 111 East 59th St. in July

October 22, 2015 03:42PM
By Mark Maurer Twitter_logo_blue copy


From left: 111 East 59th Street in Plaza District and GEMS World Academy in Chicago (inset: David Tawfik and GEMS founder Sunny Varkey)

GEMS Education, the world’s largest operator of K-12 schools, is in talks to net-lease the entire office component of a 14-story Plaza District building, according to insiders.

The Dubai-based company is one of several firms vying for the roughly 174,000-square-foot office portion of the 200,000-square-foot property at 111 East 59th Street, between Park and Lexington avenues, sources familiar with negotiations said. GEMS would occupy the space as a private school – its first in New York.

In July, David Tawfik’s Princeton International, Dune Real Estate Partners and Empire Capital Holdings acquired the building for $170 million. The seller was Lighthouse International, a nonprofit that advocates for the blind. Lighthouse continues to occupy the majority of the building.

The owners are also in negotiations with prospective retail tenants for the 26,000-square-foot space spanning the lower level, ground and second floors. The property, constructed in the 1960s, is also known as the Sol and Lillian Goldman building.

Newmark Grubb Knight Frank’s Brian Waterman is marketing the office space for lease, while a Ripco Real Estate team led by Andrew Mandell is marketing the retail. Mandell and the owners declined to comment, while Waterman and a spokesperson for GEMS could not be reached.

GEMS, which is headquartered in Dubai, U.A.E., and runs more than 70 schools in more than 12 countries, has a corporate office at 555 Madison Avenue in Midtown East. It has actively been looking to net-lease a property in that neighborhood or on the Upper East Side.

Since last year, GEMS has been mired in a legal dispute with hospitality and development firm Merchants Hospitality tied to botched plans to net-lease a proposed development on an Upper East Side site. Under a 40-year triple-net lease, GEMS sought to operate a 213,000-square-foot school at East 93rd Street and Second Avenue.

Both parties traded lawsuits, and SL Green Realty also sued GEMS over an alleged breach of contract to develop the property.