Billy Macklowe’s 386 Park Ave. South could fetch more than $200M: sources

Son of veteran developer bought office building for $111M in 2012

New York /
Oct.October 17, 2014 03:31 PM

Billy Macklowe is testing the frothy Midtown South office market with the 20-story 386 Park Avenue South, which some insiders think may trade for more than $200 million. That could nearly double the sale price from two years ago.

William Macklowe Company, in a partnership with Principal Financial Group, bought the 260,000-square-foot tower located at the corner of 27th Street, for $111.5 million in September 2012.

Since then, CBRE’s leasing team of Paul Amrich, Ross Zimbalist, David Young and Neil King has signed a string of full-floor leases. In a little more than a year, the team has signed a subsidiary of the advertising firm Interpublic Group, digital firm NewsCred and investment management firm Impact Republic.

Now, the sales team of Adam Spies and Doug Harmon from the investment banking firm Eastdil Secured is marketing the property, insiders said.

Representatives from Eastdil Secured and Macklowe declined to comment.

From the time that Macklowe, son of the developer Harry Macklowe, bought the property the asking rents in Midtown South have surged, rising more than $12 per foot to $66.58 per foot in September, up from $53.40 the same month two years ago.

The asking rents at the building range higher, from $60 per foot to $80 per foot, one insider said. The 13,000 square foot average floor plates also attracts tenants that want to have the prestige of having their own floor, a person familiar with the building said.

The neighborhood has undergone other transformations, including a burst of residential construction and conversions. Next door to the building is the new construction, luxury residential condominium and rental tower 400 Park Avenue South, being developed by Toll Brothers and Equity Residential. The penthouse in that building is priced at approximately $20 million.

At the time Macklowe bought the property, real estate insiders believed the purchase price was high, because the rents in the building were in the mid-$40s per square foot. Chris Schlank, co-managing partner with the 2012 seller Savanna, was on a panel that year with Macklowe, and joked with him about Macklowe’s expectations.

“Billy thinks he can get 10 bucks a foot more than we were getting,” Schlank said. “That’s great. In many ways, fantasy is better than reality. But I am sure Billy will do it.”


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