After ground-leasing five of its Ring portfolio office buildings to the Kaufman Organization, Gary Barnett’s Extell Development has closed on the sale of those buildings to HLP Properties in a deal worth over $250 million, sources told The Real Deal.
Collectively, the commercial buildings span over 400,000 square feet in the heart of Midtown South, and were part of Barnett’s 14-building acquisition from brothers Frank and Michael Ring. The properties are 13 West 27th Street, 119 West 24th Street, 155 West 23rd Street, 45 West 27th Street and 19 West 24th Street. Four of the buildings are ground-leased to the Kaufman Organization and Iowa-based Principal Real Estate Investors, while one is ground-leased to Kaufman and investment giant Goldman Sachs.
HLP is an LLC affiliated with New Jersey-based Edison Properties and its equity partners. TRD reported on the deal for 45 West 27th Street last week, though the deal for the other properties was unknown at the time.
The Ring brothers notoriously mismanaged their portfolio, leaving the buildings mostly vacant even as Midtown South continued to grow in appeal with technology and media tenants. After much maneuvering, Barnett bought Frank Ring’s 50 percent stake in the portfolio for north of $300 million and also acquired a controlling interest in Michael Ring’s 50 percent stake for a reported $112.5 million.
Effective rents in Midtown South were $61.68 in the second quarter, according to CompStak data.