The Real Deal New York

Stake in 1221 Sixth Avenue up for grabs: sources

Rockefeller Group, CPP own McGraw-Hill Building

April 20, 2016 04:15PM
By Hiten Samtani

1221 Sixth Avenue (Credit: Costar Group)

1221 Sixth Avenue (Credit: Costar Group)

Some of the city’s biggest real estate investors are making a play for a minority stake in 1221 Sixth Avenue, also known as the McGraw-Hill Building, sources told The Real Deal.

Rockefeller Group owns a 55 percent stake in the 51-story, 2.65 million-square-foot office tower, while Canada Pension Plan owns about 45 percent, according to data from Real Capital Analytics. CPP acquired its stake from SL Green Realty in 2010 for about $576 million, and it is this stake that sources say is being shopped around.

At the time of the CPP-SL Green deal, the building was valued at about $1.28 billion, or just over $490 per square foot. It is likely to be far more valuable today. The property is anchored by law firm White & Case, and also counts Comcast and Morgan Stanley among its tenants. Rents are in the mid-$80s per square foot, according to CoStar Group data. To compare, Scott Rechler’s RXR Realty is in contract to pay $1.7 billion for nearby 1285 Sixth Avenue, which has about 1.61 million square feet.

Among those gunning for the stake is Invesco Real Estate, according to sources. The Dallas-based private equity shop, a subsidiary of Invesco Ltd., has about $50 billion in assets under management, and has been active in the New York market recently. It paid SL Green $222 million for an 80 percent stake in 131 Spring Street in July, and bought 139 Spring Street for $112 million in January.

Representatives for Rockefeller and CPP didn’t respond to requests for comment. Representatives for Invesco declined to comment.

Kyna Doles contributed reporting.

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