Cyrus and Darius Sakhai’s Sovereign Partners is back for more New York office.
The brothers’ investment firm is in contract to buy Nuveen’s newly renovated office tower at 780 Third Avenue for $178 million, sources told The Real Deal. This makes the third office building Sovereign Partners has purchased in the past year and a half, totaling north of $400 million.
The contract price works out to just shy of $350 per square feet for the 510,000 rentable-square-foot building which, according to marketing materials, is 56 percent leased. Nuveen, the investment management arm of TIAA, recently spent $40 million renovating the 1980s-era tower, rebranding it as “the Gardens at 780” after its “biophilic design.”
Representatives for Sovereign Partners and Nuveen did not immediately respond to requests for comment. Eastdil Secured’s Will Silverman and Gary Phillips brokered the deal.
TIAA bought the 50-story tower in 1999 for a reported price of $162 million — a near record price for Third Avenue at the time. The company beat out competitors with an all-cash offer.
A TIAA prospectus shows that as of 2008 it valued the building at $341 million, but the office market and interest rates have pushed down office values across the city compared to their high-water marks.
Third Avenue, in particular, has been difficult for landlords who are struggling with high vacancies.
Across the street, the Kaufmans have listed their office building at 767 Third Avenue. Eastdil, which is the broker on the property, has set pricing expectations at about $100 million, which works out to about $300 per square foot for the half-empty building.
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The Sakhai brothers, meanwhile, have been some of the most ambitious office investors as of late.
In October they paid $126.5 million to buy the office portion of Clarion Partners’ 20-story office building at 100-104 Fifth Avenue in Midtown South. Six months earlier, they paid $113 million to buy the Tower56 office building in the Plaza District.