Boston Properties closes on Midtown South office building

Developer purchased 360 Park Ave. in JV with Enterprise Asset Management

Boston Properties CEO Owen Thomas and 360 Park Avenue South (RER, CBRE)
Boston Properties CEO Owen Thomas and 360 Park Avenue South (RER, CBRE)

Boston Properties has finally sealed the deal on its $300 million purchase of 360 Park Avenue South.

The developer purchased the building through a joint venture with the Steinberg family’s Empire Asset Management, the long-time owner of the property, Crain’s reported. After closing, the company owns 42 percent of the building and will handle leasing and management.

The landlord refinanced the property with a three-year mortgage loan for $220 million, Crain’s reported. The cost of the ground lease includes assuming about $200.3 million in mortgages and shares of interest in the REIT’s operating partnership, Boston Properties LP.

Enterprise Asset Management began shopping the ground lease of the 20-story, 450,000-square-foot building in March. The property is set to become completely vacant in the coming days after the master lease held by business information form RELX expires at the end of the year.

Future plans for the building are unclear, but Boston Properties has already set out to update common areas and systems within, Crain’s reported.

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The Commercial Observer reported CBRE’s Darcy Stacom and Bill Shanahan were part of the team that brokered the transaction.

With the acquisition, the developer now owns 10 office buildings in the city, Crain’s noted. One of those properties at 601 Lexington Avenue received a boost last week when the developer secured a $1 billion loan for the 59-story building, which has an average occupancy of about 98 percent since 2010.

Midtown South was one of the big winners in a third quarter analysis by KPG Fund and Newmark. Prospective tenants sought 6.5 million square feet of office space in the district during the quarter, up 64 percent from the first quarter of the year.

The Manhattan office market marked sizable strides toward recovery in November. Office tenants signed more than 3 million square feet of leases, the most since January 2020, according to Colliers’ monthly market snapshot.

Betting big on offices in the wake of the pandemic remains a risk, however, as the city weathers a resurgence in cases amid the ongoing spread of the omicron variant.

[Crain’s] — Holden Walter-Warner

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