Blackstone buys 49% stake in One Manhattan West at $2.9B valuation

Brookfield, Qatari Investment Authority had been soliciting interest in partial sale since December

New York /
Mar.March 15, 2022 01:30 PM

Blackstone’s Qahir Madhany with 395 Ninth Avenue (Blackstone Real Estate, Google Maps, iStock)

Brookfield has a new partner at one of the most prominent new office developments in New York City.

Blackstone Real Estate has acquired a 49 percent stake in One Manhattan West from Brookfield and the Qatar Investment Authority, the firms said Monday. The deal values the 67-story office tower at $2.85 billion.

Brookfield had reportedly been soliciting interest in a stake sale in the 2.1 million-square-foot building at 401 Ninth Avenue since mid-December. Cushman & Wakefield was advising Brookfield on a potential deal, Bloomberg reported at the time.

A week later, the Wall Street Journal reported that Blackstone was in “advanced talks” for a 49 percent stake in the tower, and that an agreement could be imminent. It took months instead of days, but the two sides were able to seal the deal this week.

“The highest quality office properties are seeing enormous demand coming out of the pandemic,” said Brookfield managing partner Ben Brown in a statement, noting the stake sale was a “promising sign for Manhattan West and prime, well-located office assets broadly.”

Qahir Madhany, managing director at Blackstone Real Estate, said the purchase aligned with the firm’s strategy of investing in well-leased, newly built office properties close to public transport and laden with amenities.

Completed in 2019, the office tower secured the city’s biggest financing deal of 2020, when Brookfield and QIA refinanced it with $1.5 billion in CMBS debt. Two mezzanine loans totaling $300 million boosted the total package to $1.8 billion.

At the time of the refinancing in August 2020, the building was 94 percent leased with an average base rent of about $91 per square foot and a weighted average lease term of more than 17 years. Major tenants include the law firm Skadden Arps, Ernst & Young, Accenture and the National Hockey League.

“We are long-term believers in New York and are confident that quality properties like One Manhattan West will continue to see strong tenant demand,” Madhany said in a statement.

The stake sale mirrors another deal between the two firms in 2017, when Blackstone purchased a 49 percent stake in Brookfield’s One Liberty Plaza.





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