RiverTower could go condo in $550M deal

Sam Zell's Equity Residential in talks to sell the Midtown rental building at 420 East 54th St.: sources

Sam Zell and 420 East 54th Street in Sutton Place
Sam Zell and 420 East 54th Street in Sutton Place

Another day, another condo conversion in Midtown.

Sam Zell’s Equity Residential is shopping the 38-story luxury rental building RiverTower at 420 East 54th Street, according to information pieced together by The Real Deal. It wasn’t immediately clear how advanced the plans are, but a listing on the Carlton Group’s crowdfunding platform appears to indicate a potential buyer has already been found. 

The potential conversion comes with a price tag of $552 million, according to the offering. The purchase price will make up the lion’s share of the overall cost. According to the offering, the potential buyers have secured financing for the conversion. Carlton, a real estate investment banking firm, is looking to raise $46.5 million in equity for the project.

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Carlton’s offering doesn’t name the building or reveal its address. But its description matches only one property in research firm CoStar Group’s database, the RiverTower. As it happens, Equity Residential has been rumored to be exploring a sale of the building, which overlooks the East River.

During Equity Residential’s fourth-quarter earnings call last year, UBS analyst Nicholas Yulico asked the REIT’s management to respond to rumors that it is “quietly testing sale of an asset to test the condo conversion market” in New York City, according to a transcript from Seeking Alpha. The firm’s COO David Santee responded: “I’d tell you that we believe everything we own is for sale, all the time.”

A spokesperson for Equity Residential declined to comment. Carlton’s CEO Howard Michaels told TRD he “cannot confirm anything.”

Chicago-based Equity Residential bought the RiverTower and two other Manhattan apartment buildings, 777 Sixth Avenue and the Longacre House Apartments at 305 West 50th Street, from then-struggling developer Harry Macklowe for a total of $475 million in February 2010.