California-based DivcoWest Real Estate Investments has expanded its footprint in New York with its second acquisition in the Big Apple.
Divco bought Boston Properties’ 1970s-era office building at 540 Madison Avenue for $310 million, sources told The Real Deal.
The purchase price works out to more than $1,050 per square foot for the 39-story, 291,000-square-foot tower at the corner of East 55th Street.
A spokesperson for Divco, which focuses most heavily on tech-heavy markets like San Jose and the San Francisco area, declined to comment. A representative for Boston Properties could not be immediately reached.
The Plaza District tower is 89 percent leased to tenants like CIM Group and the large German asset manager MEAG NY.
A source familiar with the deal said that Divco, headed by founder and CEO Stuart Shiff, was attracted to the tower for its floor plates that span more than 11,000 square feet on the lower floors, which the company feels will be attractive to the kinds of tech tenants the company has had success leasing space to at other properties.
A marketing brochure from CBRE pitches the property as a unique opportunity to buy a Midtown trophy tower in the sub-$400 million range by writing a check of roughly $100 million and financing the rest with a loan that’s in the “sweet spot” for various lenders. A CBRE team led by Bill Shanahan and Darcy Stacom negotiated the sale.
Boston Properties acquired the tower in 2008 in partnership with Kuwait Investment Authority and a Qatar sovereign wealth fund as part of its nearly $4 billion purchase of four properties – 540 Madison, the General Motors Building, 125 West 55th Street and 2 Grand Central Tower – from Harry Macklowe.
The GM Building is now the only property from that portfolio that Boston Properties still owns.
Divco, meanwhile, now owns two office properties in Manhattan. Last year the firm bought the 14-story office building at 311 West 43rd Street in Hell’s Kitchen from Billy Macklowe’s William Macklowe Co. for $131 million. Divco refinanced the property earlier this year with a $91 million mortgage from Citizens Bank.
Elsewhere, Divco last month paid $118 million to buy the West Lake Union Center office building in Seattle. The company last year inked a deal to buy the Beverly Hills office complex UTA Plaza and The Ice House for roughly $236 million, as TRD reported.