Larry Silverstein is cutting his losses and moving on from Lexington Avenue. His Silverstein Properties and the California State Teachers’ Retirement System have entered contract to sell the 35-story office building at 575 Lexington Avenue for about $360 million to Normandy Real Estate Partners and New York Life Insurance, the Wall Street Journal first reported.
Silverstein and CalSTRS paid $416 million for the building near the market’s peak in 2006, expecting higher-paying tenants to boost the value of the property. But when those tenants never materialized the building fell into distress and was the subject of a foreclosure filing in January 2011. The ownership duo avoided losing the building by making a $75 million payment toward the loan on the building. While they took a loss on the building, Silverstein and CalSTRS earned more than the $281 million the building was valued at last year, the Journal said.
The tower floors of the 740,000-square-foot property are vacant, while the lower floors are occupied by a New York Sports Club, Cornell University and several other tenants. The building was marketed by Doug Harmon and Adam Spies of Eastdil Secured. [WSJ] and [Post, 1st item]