The Real Deal New York

The $2 billion club: 245 Park to join elite group of Manhattan towers

Only three other full-stake building deals in city’s history cross the $2B threshold

From left: 245 Park Avenue, the GM Building at 767 Fifth Avenue, 11 Madison Avenue and 3 Bryant Park at 1095 Sixth Avenue

An exclusive tribe of New York City office towers is about to gain a new member.

Chinese conglomerate HNA Group has agreed to pay about $2.21 billion for 245 Park Avenue, a 1.8 million-square-foot tower, as The Real Deal first reported Monday. If the deal closes at that price, 245 Park would be only the fourth tower in the history of Manhattan to cross the $2 billion threshold in an outright sale. (TRD excluded partial-stake deals for the purpose of this analysis.)

The other properties on the list: the GM Building at 767 Fifth Avenue, 11 Madison Avenue and 3 Bryant Park, also known as 1095 Sixth Avenue. By a hair, Anbang Insurance Group’s $1.95 billion purchase of the Waldorf Astoria in 2015 failed to make the cut.

The building at 245 Park Avenue is home to such tenants as Heineken, Wisdom Tree Investments, and Angelo Gordon & Co. The landlords, Brookfield Property Partners and the New York State Teachers’ Retirement System, is losing Major League Baseball as a longtime tenant. MLB is moving to 1271 Sixth Avenue at Rockefeller Center. The property’s asking rents are in the high-$80s per square foot.

Here’s a breakdown of each member of the $2 billion club:

GM Building at 767 Fifth Avenue
Owners: Boston Properties, Zhang Xin, Safra family

In 2008, Harry Macklowe’s luck ran out, and Boston Properties came calling. The real estate investment trust paid $2.8 billion for the trophy skyscraper, which had driven many to ruin and even inspired a book (and future film). Boston Properties bought the building from Macklowe as part of a $3.95 billion package that included three other towers. The GM Building deal penciled out to $2.8 billion, or $1,400 per square foot.

In 2013, the property replicated the feat: When Chinese development magnate Zhang Xin and Brazilian banking titan Moise Safra took a 40 percent stake in the property, the building was valued at $3.4 billion. Tenants include Estee Lauder, law firm Weil, Gotshal & Manges, and Icahn Enterprises.

11 Madison Avenue
Owners: SL Green Realty, PGIM Real Estate

SL Green Realty’s 2015 purchase of this 29-story, 2.3 million-square-foot Art Deco tower in the Flatiron District from Sapir Organization and CIM Group was the most expensive single-building deal in the city to date. SL Green paid $2.3 billion, or $973 per square foot, plus $300 million in lease-stipulated improvements. PGIM Real Estate took a 40 percent stake in the building last year. Tenants include Sony, Credit Suisse and Yelp.

3 Bryant Park at 1095 Sixth Avenue
Owners: Ivanhoe Cambridge, Callahan Capital Partners, Hong Kong Monetary Authority

In another deal that made 2015 a record year for investment sales, Canadian investment firm Ivanhoe Cambridge and its U.S. investment partner Callahan Capital Partners bought this 41-story, 1.2 million-square-foot Midtown tower for $2.2 billion. The price came out to roughly $1,875 per square foot. Last year, the Hong Kong Monetary Authority took a 49 percent stake. Tenants include Salesforce, Verizon and Whole Foods.