Return to work: Office deals dominate 2021’s top investment sales

SL Green’s $953M Hudson Yards deal leads this year’s list

New York /
Dec.December 28, 2021 07:00 AM
441 Ninth Avenue with CommonWealth Partners' Brett Munger and 51 West 52nd Street with Harbor Group’s Jordan Slone (Google Maps, CommonWealth Partners, Hudson Commons)

441 Ninth Avenue with CommonWealth Partners’ Brett Munger and 51 West 52nd Street with Harbor Group’s Jordan Slone (Google Maps, CommonWealth Partners, Hudson Commons)

New York’s investment sales market in 2021 proved to be a bright spot — if you look beyond the bottom-line numbers.

The top 10 deals of the year totaled $4.57 billion, which was actually below the total of $5.53 billion in pandemic-ravaged 2020.

Last year’s total, though, included several large deals that actually got started in 2019, before Covid, such as Amazon’s $978 million purchase of the Lord & Taylor building and German insurer Munich RE’s $900 million acquisition of the 330 Madison Avenue office tower.

Property types that were popular during the 2021 recovery include large office buildings and apartments. Others, such as retail and development sites (which are covered in another list by The Real Deal) were out of favor.

Here, then, are the top 10 investment sales of the year:

1. 441 Ninth Avenue | $1 billion
Buyer: CommonWealth Partners
Seller: Cove Property Group and Baupost Group
Brokerage: CBRE

Thirty months. Three-zero.

That’s how long it had been since New York saw a real estate deal cross the $1 billion mark. Kevin Hoo’s Cove Property Group and his partner, Boston-based hedge fund Baupost Group, broke that streak in December when they closed on the $1.033 billion sale of their Hudson Commons office tower to Los Angeles–based CommonWealth Partners, an adviser to the California Public Employees’ Retirement System fund.

It’s the largest investment sale since June 2019, when Related Companies bought WarnerMedia’s office condos at 30 Hudson Yards for $2.2 billion.

Hoo and his partners bought the Hudson Yards-area property in 2006 and added 17 floors of office space, leasing the building to tenants like Peloton and Lyft.

2. 51 West 52nd Street | $760 million
Buyer: Harbor Group International
Seller: ViacomCBS
Brokerage: CBRE

CBS’s famed Black Rock building appeared to be one of the earliest victims of the virus panic.

Shortly after Viacom merged with CBS in late 2019, the company decided to divest itself of the 38-story tower designed by Eero Saarinen. It put the building up for sale in 2020, aiming to get more than $1 billion, but suspended the effort in March as Covid gripped the city.

The property came back to market and sold to Harbor Group, which is reportedly planning significant upgrades to it.

3. 125 West End Avenue | $450 million
Buyer: LaSalle Investment Management
Seller: Taconic Partners and Nuveen Real Estate
Brokerage: CBRE

Taconic Partners and Nuveen Real Estate brought in LaSalle Investment Management as a partner on their Upper West Side life sciences hub.

Taconic and Nuveen had purchased the 400,000-square-foot property — a former Chrysler facility on Manhattan’s Automobile Row — in 2018 from the Walt Disney, which was selling off more than $1 billion of real estate amid its acquisition of 21st Century Fox.

ABC vacated the property in January and the developers kicked off construction a month later to reposition the property for life sciences tenants. At the same time that LaSalle came on board to inject equity into the project, the owners landed nearly $400 million in construction financing.

4. 265-275 Cherry Street | $435 million
Buyer: Related Companies
Seller: CIM Group and L+M Development Partners
Brokerage: Cushman & Wakefield

Related returned to its roots with this purchase of a pair of large Section 8 buildings on the Lower East Side.

The Stephen Ross-founded company got its start in the 1970s buying and rehabilitating affordable housing. With renters fleeing market-rate apartments during the city’s lockdown, demand grew for owning affordable housing, which generally provides steadier income.

The buildings at 265-275 Cherry Street, known as Lands End II, hold roughly 500 units combined and their rents are backstopped by the reliable federal Section 8 project-based voucher program.

5. 1177 Sixth Avenue | $417 million
Buyer: CalSTRS
Seller: Canada Pension Plan Investment Board
Brokerage: CBRE

UBS Realty Investors sold its roughly 50 percent stake in 1177 Sixth Avenue in a deal that valued the 47-story tower at $860 million.

The buyer was the California State Teachers’ Retirement System, which already owned the other half of the property and now owns it all in partnership with Silverstein Properties.

CalSTRS and Silverstein had bought the tower for about $1 billion in 2007. They put the deal into motion when they exercised an option to buy UBS out earlier this year at a price of $825 million. The option, though, gave UBS the right to match the CalSTRS/Silverstein price and buy its partners out.

The valuation represented a capitalization rate of roughly 4.5 percent. That’s about where pricing for similar properties was coming in before the pandemic, and was seen as a data point that calmed investors’ nerves as the move to work-from-home rattled the market.

6. One Park Avenue | $393.8 million
Buyer: Vornado Realty Trust
Seller: Canada Pension Plan Investment Board
Brokerage: CBRE

Vornado Realty Trust bought its partner’s stake in this Midtown building, becoming the sole owner.

The Canada Pension Plan Investment Board sold its 45 percent stake to Vornado in a deal that valued the 943,000-square-foot building at $875 million.

Vornado paid $158 million in cash and assumed the pension fund’s portion of the $525 million of debt on the property.

One Park Avenue’s tenants include Robert A.M. Stern Architects, Equinox and NYU Langone Medical Center. As of February, the building was 98 percent leased to 22 tenants.

7. 635-641 Sixth Avenue | $325 million
Buyer: Spear Street Capital
Seller: SL Green Realty
Brokerage: CBRE

SL Green continued its sell-off with its shedding of this Chelsea retail-and-office building.

The REIT completed a redevelopment of the 267,000-square-foot building in 2015, upgrading the lobby, elevators and a penthouse rooftop. The property is 94 percent leased to software company Infor through 2030.

SL Green bought the property in 2012 for $173 million.

8. 524 Broadway | $323.5 million
Buyer: Northwood Investors
Seller: Heller Properties
Brokerage: Cushman & Wakefield

Soho was hit hard when stores shut down and then looters ransacked shops while police were distracted by racial-justice protests.

Northwood’s deal to buy a pair of buildings at the high-profile corner of Broadway and Spring Street was seen as a shot in the arm for the neighborhood.

The buildings include 180,000 square feet of office and 60,000 square feet of retail. Among the tenants are Keith McNally’s famed Balthazar restaurant, WeWork and the Aritzia fashion boutique.

9. 116 John Street | $247.5 million
Buyer: Silverstein Properties
Seller: Metro Loft Management

Larry Silverstein picked up this FiDi apartment tower from Nathan Berman’s Metro Loft Management for $248 million.

Built in the 1930s, 116 John Street was originally an office tower. In 2011 Berman entered into a joint venture with owner Hacienda Intercontinental Realty to convert the 35-story building — one of the few remaining office towers on John Street — into apartments.

A large portion of the space is leased to Sonder, which rents the units out as apartment-style hotel rooms.

Elsewhere in FiDi, Silverstein is teaming up with Brookfield to develop one of the last developable parcels at the World Trade Center site into a 1.6 million-square-foot, mixed-use tower with 1,325 residential units.

10. 111 Wall Street | $220 million
Buyer: Nightingale Properties and Wafra Capital Partners
Seller: Omnispective Management
Brokerage: Newmark

Nightingale and Wafra took full ownership of this Financial District office building with their $220 million purchase of the land underneath in June.

Elie Schwartz and Simon Singer’s Nightingale had teamed up earlier with frequent partner Wafra, an arm of Kuwait’s social security fund, to buy the leasehold on the 1.2-million-square-foot building in early 2020.

They took full control with the purchase of the fee position and secured a $500 million loan to reposition the property. The owners are planning an overhaul that includes a new curtain wall and a renovated lobby.





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