Related Fund Management selling Midtown office at 67% discount

Discounts abound across the national office market, and not even the most prominent landlords are spared.

An affiliate of Related Companies is selling a property at 321 West 44th Street in Hell’s Kitchen for below $50 million, Bloomberg reported. The buyers — Namdar Realty Group and Empire Capital Holdings — are benefitting from a roughly 67 percent discount from the building’s last sale price, $153 million in 2018.

The transaction was a short sale, meaning Related and its lenders agreed to sell the property for less than what was outstanding on its mortgage. The balance on the loan is above $100 million.

The 10-story, 220,000-square-foot office building counts Battery Studios and AKA among its tenant roster.

A team from CBRE arranged the transaction. Related, Empire and CBRE declined to comment to Bloomberg, while Namdar did not return a request for comment.

The sale is just the latest example of how office values have dropped precipitously in recent years as high interest rates and the pandemic have taken a bite out of the sector. As maturities loom and costs surge, owners are finding it better to cut their losses at a discount rather than play out a distress scenario.

As for Namdar and Empire Capital, this is not their first joint venture in Manhattan’s office market. Last year, Empire acquired 529 Fifth Avenue for $107.5 million from Silverstein Properties; Namdar was part of the buyer group. Two years ago, the partners bought 830 Third Avenue, a 14-story Midtown building, for $72 million from AEW Capital Management.

A year earlier, the two joined forces to acquire 345 Seventh Avenue for about $107 million

Namdar’s leader, Igal Namdar, is known to gamble on struggling Class B and C malls in smaller cities throughout the United States. Namdar Realty Group owns and manages about 57 million square feet of commercial real estate across the country.

— Holden Walter-Warner

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