The Real Deal New York

The 10 biggest investment sales of 2015

Blackstone, RXR and Eastdil are among the recurring players

December 29, 2015 09:00AM
By Mark Maurer Twitter_logo_blue copy

Top-Investment-Sales-2015

Clockwise from top left: Jonathan Gray, Marc Holliday, Wu Xiaohui, the Waldorf Astoria, 11 Madison Avenue and Stuy Town

UPDATED, Dec. 29, 10:25 a.m.: What do the 10 biggest New York City investment sales of 2015 have in common? All the deals, whether they were for mega complexes, standalone trophy towers or a stake in a multi-building package, crossed the billion-dollar threshold.

The numbers don’t lie: The year was unusually strong. All told, commercial real estate investment activity in the city is on pace to hit a record $70 billion in deal volume, a 12.5 percent jump from the previous record during the 2007 peak, according to CBRE and Cushman & Wakefield data.

Jim Costello, senior vice president at Real Capital Analytics, said industry players have responded to the market surge with a mix of excitement and fear — as opposed to 2007, when there was very little fear.

“This is certainly a time to be cautious,” Costello said. “The forces driving the market are a lot different now. Single-asset classes are doing much more of the heavy lifting than portfolio plays, and global capital is flooding in.”

The Real Deal looked at the year’s priciest building deals, which together totaled roughly $22 billion.

Familiar faces abounded, from the Blackstone Group to Scott Rechler’s RXR Realty to the broker tag team of Eastdil Secured’s Doug Harmon and Adam Spies. Foreign investors, such as Ivanhoe Cambridge and Anbang Insurance Group, also made a big splash.

Note: The list is based on data from Real Capital Analytics and CoStar Group. The ranking is based on all closed 2015 sales and all known in-contract sales as of press time. It includes building portfolios and partial interests, but excludes development sites and development projects.

1. Stuyvesant Town-Peter Cooper Village, $5.3 billion
Buyer: Blackstone Group and Ivanhoe Cambridge
Seller: CWCapital (on behalf of lenders)
Brokerage: Eastdil Secured
On a list often dominated by the sale of Class A office skyscrapers, an apartment complex – the biggest in Manhattan, in fact – topped them all. The city, intent on preserving the 11,200-unit complex’s affordable units, struck a deal to maintain 5,000 units as affordable for 20 years. In exchange, private equity giant Blackstone and Canadian investment firm Ivanhoe Cambridge received $225 million in benefits and the administration’s blessing for the deal. The complex doubled as the biggest multifamily portfolio of 2015, by a long shot. (The second biggest portfolio was the 24-building, $690 million Caiola package, also acquired by Blackstone and a partner.)

2. 11 Madison Avenue, $2.29 billion
Buyer: SL Green Realty
Seller: Sapir Organization and CIM Group
Brokerage: CBRE

Although Stuy Town surpassed it in December as the biggest deal of the year, 11 Madison Avenue stands firm as the largest single-building transaction in New York City’s history. SL Green closed in August on the $2.29 billion purchase of the 2.3 million-square-foot, 29-story Art Deco skyscraper in the Flatiron District. The purchase price excludes $300 million in lease-stipulated improvements. The sellers, the Sapir Organization and minority partner CIM Group, pocketed a hefty sum. Sapir paid $675 million in 2003 and proceeded to reposition the property as a TAMI-tenant destination, with Sony and Yelp signing in recent years. Yes, Boston Properties paid more for the GM Building in 2008 — $2.8 billion — but that was part of a four-building package.

1095 Sixth

1095 Sixth Avenue and Ivanhoe Cambridge’s Daniel Fournier

3. 1095 Sixth Avenue (3 Bryant Park), $2.2 billion
Buyer: Ivanhoe Cambridge and Callahan Capital Properties
Seller: Blackstone Group
Brokerage: Eastdil Secured
When this 1.2 million-square-foot office tower overlooking Bryant Park entered contract in late 2014, it was technically the priciest building sale of that year. Now that it has closed, it still charts pretty high in what was a banner year for the investment sales space. Ivanhoe Cambridge, in partnership with Chicago-based private equity firm Callahan Capital Properties, bought the property from its future Stuy Town partner, Blackstone. Blackstone took ownership of the 1.2 million-square-foot building as part of the $39 billion purchase of Sam Zell’s Equity Office Properties Trust in 2007. MetLife occupies more than 400,000 square feet there, with a Whole Foods coming to the ground floor sometime in 2016.

blackstone-rxr

601 West 26th Street and 340 Madison Avenue

4. RXR office portfolio (50 percent stake), $2 billion
Buyer: Blackstone Group
Seller: RXR Realty
Brokerage: Eastdil Secured
Through its core-plus real estate fund, Blackstone bought a partial stake in a six-building package owned by RXR Realty. The portfolio, which was valued at $4 billion after the deal, includes properties such as 620 Sixth Avenue, 1330 Sixth Avenue, 340 Madison Avenue and the Starrett-Lehigh Building at 601 West 26th Street. RXR’s plan was to return most of its investors’ equity and to continue managing the properties. Blackstone was looking for assets that fell into a middle ground between risky deals and core investments. The deal closed in several installments throughout the year, sources said.

5. Waldorf Astoria, $1.95 billion
Buyer: Anbang Insurance Group
Seller: Hilton Worldwide Holdings
Brokerage: Eastdil Secured
Perhaps the highest-profile Chinese investment in New York was Anbang’s record-setting purchase of the iconic property on Park Avenue, the priciest-ever purchase of a U.S. hotel. Sources called it a “chairman to chairman” deal, in which Anbang’s Wu Xiaohui flew back and forth to New York over a two-week period to negotiate directly with Jonathan Gray, head of real estate for Blackstone, which holds a majority stake in Hilton Worldwide Holdings. The Waldorf Astoria was the biggest hotel in the world when it opened in 1931.

1285 787

From left: 1285 Sixth Avenue and 787 Seventh Avenue in Midtown

6. 787 Seventh Avenue, $1.9 billion (in-contract, pending)
Buyer: CalPERS
Seller: AXA Financial
Brokerage: Eastdil Secured
At the tail end of the year, AXA Financial struck a deal to sell a trophy two-building package for a combined $3.6 billion. The Midtown office towers sit side by side on a four-acre site between West 51st and 52nd streets. The larger of the two deals is for 787 Seventh Avenue, which CalPERS, a California pension fund, is expected to close on early next year for $1.9 billion. The 51-story, 1.7 million-square-foot property is almost fully occupied.

7. 730 Fifth Avenue (Crown Building), $1.78 billion
Buyer: Jeff Sutton, General Growth Properties, SHVO and Capital Group
Seller: Winter Organization and Spitzer Enterprises
Brokerage: Eastdil Secured

730 Fifth Avenue in Midtown

730 Fifth Avenue in Midtown

In the span of a year, the 390,000-square-foot Crown Building was associated with at least two price records – one for the city, one for the world. In April, the sale itself, to Jeff Sutton and Sandeep Mathrani’s General Growth Properties, set a global record for highest price per square foot paid, at $4,490. Then, in November, luxury Italian brand Bulgari set a new retail record in the city with a 15-year lease exceeding $5,000 a foot in rent. As part of that deal, Michael Shvo’s SHVO and Russian developer Vladislav Doronin’s Capital Group bought the 290,000-square-foot non-retail portion — floors four through 24 — of the property for $475 million. The 29-story office-and-retail property at 57th Street last sold in 1991, when Winter Organization and Spitzer Enterprises bought it from the government of the Philippines for $93.6 million.

8. 1285 Sixth Avenue, $1.7 billion (in-contract, pending)
Buyer: RXR Realty
Seller: AXA Financial and JPMorgan Chase
Brokerage: Eastdil Secured
The second building in the two-pronged AXA Financial sale is 1285 Sixth Avenue. Scott Rechler’s RXR is expected to close by early next year on the 39-story, 1.7 million-square-foot building. Swiss Bank UBS AG anchors the fully-occupied building. AXA, formerly known as the Equitable Companies, bought its 50 percent stake from AXA Equitable Life Insurance Company for $587.5 million in 2012, records show.

9. Trinity Church office portfolio (44 percent stake), $1.56 billion (in-contract, pending)
Buyer: Norges Bank
Seller: Trinity Real Estate
Brokerage: CBRE
Norges Bank Investment Management, which manages investments for Norway’s sovereign wealth fund, signed a contract in November for a big piece of Trinity Church’s extensive office holdings in Hudson Square. The 11 buildings included in the deal, now valued together at $3.6 billion, span 5 million square feet and are 94 percent leased. The package’s crown jewel is One Hudson Square, a 1.2 million-square-foot property at 75 Varick Street. Vornado Realty Trust, SL Green Realty and Brookfield Property Partners were among the bidders.

Helmsley Building

RXR’s Scott Rechler and 230 Park Avenue in Midtown

10. 230 Park Avenue (Helmsley Building), $1.2 billion
Buyer: RXR Realty and Blackstone Group
Seller: Invesco, Monday Properties and South Korea’s National Pension Service
Brokerage: CBRE
RXR made a big splash in May with the announcement that it was buying the iconic Helmsley Building. TRD later revealed that it was partnering with Blackstone on the buy. The 34-story, 1.4 million-square-foot tower, known for its cupola, sits directly north of Grand Central Terminal.

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