Midtown tower sells for 96% discount on auction site Ten-X

Going, going, gone.

A nearly 1 million-square-foot Midtown office building has sold at a 97% discount, for a top bid of $8.5 million on the online auction site Ten-X.

The Swiss bank UBS and its brokers at JLL listed the 920,000-square-foot building at 135 West 50th Street for sale last month on the platform. The two-day auction kicked off on Monday with a starting bid of $7.5 million.

It’s 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.”

UBS owns the property through a long-term leasehold, and Safehold owns the ground underneath the building. The 1960s-era Class A building is 35 percent occupied and recently underwent a $76 million renovation, according to the listing. 

UBS sold the property a block west of Rockefeller Center to Safehold in 2019 for $285 million, then signed a $221 million lease that expires in 2123. A source said the ground lease probably negatively impacted the property value.

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 list 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.