Not all big-ticket New York real estate deals these days are fire sales.
The Related Companies has an agreement to sell its Union Square apartment building for about $200 million to a firm representing an overseas buyer, sources familiar with the transaction told The Real Deal.
The contract pricing for the residential component of One Union Square South works out to a capitalization rate in the low 4 percent area. That figure represents aggressive pricing for a real estate asset at a time when some sellers are taking deep discounts.
A representative for Related declined to comment.
The buyer, which sources described as a New York-based firm representing a multi-generation overseas family, approached Related to purchase the building in an off-market deal. It is now in contract.
Sitting at the southeastern edge of its namesake park, One Union Square South is easily recognizable by the “Metronome” public artwork that Related commissioned from artists Kristen Jones and Andrew Ginzel.
Related developed the 27-story, 174,000-square-foot building in 1998. It has 240 residential units and a retail component leased to Best Buy, Nordstrom Rack and Regal Cinemas.
The purchase is just for the residential component of the building, of which 20 percent of units are affordable under a regulatory agreement that’s ending shortly.
The aggressive pricing on the deal is an anomaly in a market where buyers are snapping up properties at discounts from sellers who are forced to unload assets. The United Kingdom’s billionaire Reuben Brothers, for example, have been snapping up New York real estate assets at bargain rates.
Contact Rich Bockmann at [email protected] or 908-415-5229