The Real Deal New York

MetLife nears deal for preferred equity stake in 498 Seventh Avenue

George Comfort just signed health care union to huge lease in office building
By Mark Maurer | August 08, 2017 01:50PM

498 Seventh Avenue and George Comfort CEO Peter Duncan (Credit: George Comfort & Sons)

MetLife is in advanced talks to take a preferred equity stake in George Comfort & Sons’ 498 Seventh Avenue, a Garment District office building where a health care union just signed one of the largest office leases of the year.

The deal is for as much as $150 million in investment and would value the 25-story, 960,000-square-foot building at about $700 million, The Real Deal has learned.

The landlord, in partnership with JPMorgan Asset Management and Loeb Partners Realty, was seeking additional equity and debt in preparation for moving the health care union, 1199SEIU Healthcare Workers East, into 580,000 square feet across 14 floors. The tenant signed the lease last month. George Comfort has owned the property since 1997.

Cushman & Wakefield’s Adam Spies, Steve Kohn and Joshua King are brokering the deal. Representatives for MetLife and Cushman declined to comment. Representatives for George Comfort couldn’t be reached.

Some major players have opted to bring in preferred equity instead of scoring mezzanine debt or selling. Paramount Group and Savanna took a preferred equity stake in Harbor Group International’s 55 Broadway earlier this year. Paramount, which has a preferred equity stake in Sitt Asset Management’s 2 Herald Square, is expected to take control of that property’s leasehold later this month, sources said.

Hiten Samtani contributed reporting.