Going, going, gone.
A nearly 1 million-square-foot Midtown office building has sold at a steep discount, fetching $8.5 million on the online auction site Ten-X.
The seller, Swiss bank UBS, had spent $332.5 million it spent to buy the property in 2006. The staggering, 97 percent loss on the building at 135 West 50th Street was minimally offset by a $6 million gain UBS realized by buying and selling the ground beneath it in the interim. (UBS bought the ground in 2012 for $279 million, then sold it to Safehold in 2019 for $285 million.)
UBS and its brokers at JLL listed the 920,000-square-foot building for sale last month on the online platform. The two-day auction kicked off on Monday with a starting bid of $7.5 million.
It was an unusual place to try and sell such a large property. Online listing platforms like Ten-X have a reputation as places where sellers go to unload lower-quality middle market properties, not where major institutions go to sell big-time assets.
“We’ve worked with UBS before and we’ve worked with the broker before,” Ten-X president Steven Jacobs said in an interview earlier this month. “UBS’s perspective was, ‘We need to sell this quick, we’ve kind of made peace with this is gonna be a big loss. We need to sell it and we need to move on.”
Safehold still owns the ground underneath the 1960s-era Class A building, which is 35 percent occupied and recently underwent a $76 million renovation, according to the listing.
After selling Safehold the land, which is a block west of Rockefeller Center, UBS signed a $221 million lease that expires in 2123. A source said the ground lease probably hurt the property value. Now those payments will be the responsibility of the new building owner, who has not been identified.
Ten-X was founded in 2007 as Auction.com, a residential real estate deal platform, and has been backed by investors such as Barry Sternlicht’s Starwood Capital, Stone Point and CapitalG. In 2016, it launched a separate platform known as Ten-X Commercial, which provided a marketplace for commercial properties.
In 2020, commercial real estate data giant CoStar Group purchased the commercial real estate portion of the platform for $190 million from private-equity firm Thomas H. Lee Partners.
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“We do a lot with the brokerage companies and there’s a lot of brokers that love what we do,” Jacobs said. “There’s a lot of brokers that won’t work with us because maybe those brokers have been in business 30 years and they’ve been successful and they don’t need technology.”
JLL’s Andrew Scandalios, who had the listing, did not respond to a request for comment.
Ten-X declined to comment on the final price but said the sale was expected to close in the next 30 days.
This story has been revised to reflect that UBS bought the ground at 135 West 50th Street in 2012, after purchasing the building.