The Real Deal New York

Dermot, Dutch pension fund in contract to buy Equity Residential building for $416M

Partners recently teamed up on Hell’s Kitchen multifamily buy
By Rich Bockmann | July 26, 2018 06:19PM

Sam Zell, 101 West End Avenue and Steve Benjamin

Equity Residential is in contract to sell an Upper West Side apartment building to a joint venture of the Dermot Company and a Dutch pension fund for more than $400 million, sources told The Real Deal.

Dermot and PGGM, the second-largest pension fund in the Netherlands, have a contract to buy the 503-unit 101 West End Avenue, sources told TRD.

Representatives for Dermot and Equity Residential could not be reached.

Equity Residential president David Neithercut alluded to the deal on the company’s earnings call Wednesday without identifying the buyers.

He said the sale, expected to close later this quarter, represents “an opportunity for us to reduce our exposure to the West Side where we have a significant portfolio of assets, as well as an opportunity to address the negative impact on our New York City growth rates by reducing our exposure to properties with expiring 421-a real estate tax benefits.”

The real estate investment trust founded by Sam Zell acquired the 630,000-square-foot building in the Lincoln Square neighborhood in 2013 when it bought 60 percent of the assets from Denver-based REIT Archstone-Smith.

Archstone Smith bought the property for $209 million in 2002 from Tishman Speyer, which had developed the building and finished construction on it two years earlier.

Cushman & Wakefield’s Doug Harmon and Adam Spies quietly marketed the building for Equity Residential. The brokers couldn’t be reached.

This is not the first deal together on the West Side of Manhattan for Dermot, headed by Stephen Benjamin, and PGGM. The two are in contract to buy the 375-unit Helux apartment building at 520 West 42nd Street in Hell’s Kitchen from the Gotham Organization for $193 million.

The deal, also brokered by Cushman’s Harmon and Spies, is expected to close shortly.