Brookfield eyeing One Manhattan West stake sale

Potential sale would value office tower at $2.8B: report

 Brookfield Asset Management CEO Bruce Flatt and 395 Ninth Avenue (Brookfield)
Brookfield Asset Management CEO Bruce Flatt and 395 Ninth Avenue (Brookfield)

Brookfield Asset Management is reportedly looking to lighten its load at one of New York City’s most prominent office developments.

The firm is soliciting interest for a potential sale of a stake in One Manhattan West in Hudson Yards, people with knowledge of the matter told Bloomberg. The sale of the share the firm is looking to part ways with would reportedly value the building at nearly $2.8 billion.

Cushman & Wakefield is advising Brookfield, according to Bloomberg.

The office building scored the biggest financing deal of 2020 when Brookfield and Qatar Investment Authority landed $1.5 billion in September 2020 through the commercial mortgage backed securities market. Two mezzanine loans of $300 million boosted the financing to $1.8 billion.

A rent roll of the 70-story office tower in August 2020 found the weighted average lease term for tenants in the building to be more than 17 years. Law firm Skadden Arps and accounting firm Ernst & Young combined to make up more than 58 percent of the base rent at the building. Other major tenants include Accenture and the National Hockey League.

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Here’s how much tenants are paying at One Manhattan West

As of August 2020, the 2.1 million-square-foot office portion of the building was 94 percent leased to seven major tenants and three Brookfield affiliates. Average base rent was about $91 per square foot, but most smaller tenants paid more than $120 per square foot. Several anchor tenants took advantage of significant discounts from the market rate.

The pandemic devastated New York City’s office market. Figures released by the state comptroller in October showed the market value of city office buildings dropped by $28.6 billion during the previous fiscal year, the first decline of the century.

That hasn’t prevented big deals from seeping back into the city, however. In September, Google announced it was purchasing 550 Washington Street for $2.1 billion. In doing so, the tech giant, which was already leasing St. John’s Terminal, executed the biggest office purchase in the entire country since the onset of the pandemic.

[Bloomberg] — Holden Walter-Warner