Real estate investment firm L&L Holding Company, formerly the minority stakeholder in a new office development at 425 Park Avenue, has acquired the remaining 90 percent interest in the property from Lehman Brothers, The Real Deal has learned.
The company paid close to $140 million for Lehman’s stake, said Robert Lapidus, president and chief investment officer at L&L. The stake was valued by Lehman at $84 million in 2006. Eastdil Secured’s Adam Spies and Joshua King marketed the stake on behalf of Lehman, which had been trying to unload its ownership interest since February.
Neither Spies nor King were immediately available for comment.
L&L is planning to bring a 650,000-square-foot office tower to the full-block site, between East 55th and East 56th streets, to be designed by Foster + Partners, it was previously reported. It will be the first full-block office project on Park Avenue in more than 50 years, according to a statement from the firm.
The sale of the property marks another milestone for Lehman, which has been slowly selling off its assets following its 2008 bankruptcy. Before selling off 425 Park, the real estate group at Lehman waited until the new office development had reached several significant milestones to reap the best price, said Ashish Gupta, a senior vice president at Lehman.
“Over the last two years in particular, Lehman and L&L Holding have systematically de-risked the development opportunity by investing discretionary capital to fix several design and cost variables,” Gupta said in a statement. “The achievement of certain predevelopment milestones, including the selection of Foster + Partners as the project architect, created a more defined project which shifted the risk profile of the investment and allowed the partnership to complete a capitalization that replaces Lehman’s ownership with new, long-term capital alongside L&L.”
Other former Lehman projects, such as 10 Madison Square Park, which is now a condominium property, have also been revived by local developers. Meanwhile, buildings partly owned by Lehman at 25 Broad Street and 45 Broad Street have been sold.
L&L declined to name its investment partners on the deal.
Construction on the new 41-story office property is slated to start in 2013 and is expected to be completed by 2017.