Paydirt: JPMorgan HQ, Anbang gets a chaperone & other industry news you need to start your week
Meet the new address, same as the old address: “It is the ambition of the New Yorker to live upon Fifth Avenue, to take his airings in the [Central] Park, and to sleep with his fathers in Green-Wood,” the New York Times wrote in 1866. I would suggest an addendum: “It is also the ambition of the New Yorker to have his offices upon Park Avenue – or maybe in Hudson Yards.”
After Related and Brookfield managed to teleport many of the city’s most prestigious companies over to the West Side (think Amazon, Skadden Arps, KKR, Wells Fargo, BlackRock) , Park Avenue last week scored a major win when JPMorgan announced it would demolish its current HQ at 270 Park and build a new 70-story tower in its place. The bank, the country’s richest, will add an additional 1 million square feet to its footprint at the property, with the redevelopment taking place under the recently-passed Midtown East rezoning. Tishman Speyer is reportedly the front-runner to handle the 2.5 million-square-foot job.
The decision, however, wasn’t made out of any particular loyalty to the East Side. JPMorgan, too, had been looking to relocate to Hudson Yards, with plans for a two-tower, $6.5 billion headquarters on Related-owned sites. Those plans, however, fell through after the city rejected the bank’s request for a further $1 billion in tax breaks and money.
Show and Dell: There’s a fun scene in “Billions” in which Damian Lewis’ character Bobby Axelrod throws down a cool $100 million to get naming rights for Eads Hall, an event venue for the city’s glitterati and business elite. It’s illustrative of the extent to which finance types run this town, and compete with each other for the totems of extreme wealth.
But for now, one of the city’s ultimate status symbols – owning its priciest home – belongs not to a hedge funder or a private equity mogul – but to a techie. Michael Dell was just revealed as the mystery buyer behind the city’s only nine-figure closed sale, the $100.5 million penthouse at Extell’s One57. Dell, whose net worth is pegged at $23 billion, has made somewhat of a habit of owning the fanciest home in several spots across the U.S., including Hawaii and Boston.
While Dell has the condo record, the record for the priciest townhouse buy is shared by a very different sort of billionaire: Len Blavatnik, who closed this month on 19 East 64th Street, a property he’s coveted for years. Blavatnik paid $90 million for the asset, with sources saying he’s planning some sort of megacompound on the block (he already owned 15 East 64th Street next door.)
And the bragging rights are expected to go back to Big Finance when closings at 220 Central Park South begin. A penthouse at the Vornado project is reportedly in contract to hedge funder Ken Griffin for over $200 million. Take that, PC nerds.
Chaperone for former prom queen: Anbang is coming under adult supervision, after a three-year run of heady, multibillion-dollar deals that saw the Chinese insurer take control of some of New York’s most notable assets and mull an investment in the Kushner Companies’ albatross, 666 Fifth Avenue.
On Thursday, China’s top insurance regulator announced that it was taking over Anbang and all of its assets for at least a year amid fraud allegations against the company. Wu Xiaohui, Anbang’s former chairman, has been indicted on charges of fraudulent fundraising and abusing his position, according to the Wall Street Journal, and many of the company’s prized assets are expected to hit the market – though since Anbang was thought to have overpaid for many of them, pricing could be tricky.
The move to put Anbang under the stewardship of the China Insurance Regulatory Commission shows that Beijing is serious about its efforts to deal with its gray rhinos, companies that went on a debt-fueled spending spree to pick up a big overseas property portfolio. HNA must be watching closely.
Witkoff, Lorber & co. cash out big at Times Square Marriott Edition: Never fear, Masa Son is here! After facing several delays at their Times Square Marriott Edition project, Steve Witkoff, Ian Schrager, Winthrop Realty Trust, Howard Lorber and other partners look to have made a tidy sum from selling their stakes to a joint venture between Softbank-owned Fortress and Maefield Development. As my colleagues Mark Maurer and Christian Bautista reported last week, Witkoff and co. are expected to stay on and get the job done on behalf of the new owners. They bought the site for just $430 million in 2012, so even accounting for all their construction and associated costs over the past five years, this is a solid payday – the deal is said to value the property at $1.5 billion.
There’s been plenty of talk about how Masa Son’s Softbank is distorting numbers in the real estate technology space, with both Compass and WeWork beneficiaries of his venture dollars at incredibly high valuations. But there should be more discussion of how the same might be happening in the real estate investment world: Is Fortress going to throw money around with the same abandon that Softbank’s Vision Fund has been?
(Paydirt is a weekly column that riffs on the biggest NYC real estate news of the moment, providing analysis and historical context on the deals and players that make this town tick. Read more from Paydirt here.)