Morgan Stanley is looking to sell the office building at 500 Park Avenue, as it pivots to focus on other areas like warehouses and residential.
The investment bank put the 11 stories of office space, totaling 200,000 square feet, up for sale, eyeing a price of $125 million, The Real Deal has learned.
500 Park, a boutique office and residential building, was first developed in 1960 as the headquarters of Pepsi-Cola. The building’s lower eleven floors are dedicated to office space while the upper floors contain 56 residential condominiums.
The newly listed office property is being pitched as a value-add play. A new owner could take advantage of the “strategic rent growth potential” by upgrading the lobby and adding amenities, according to an offering memorandum. Those could help mark up the rents on expiring leases to the Plaza District market rate averaging around $120 per square foot.
A spokesperson for Morgan Stanley did not immediately respond to a request for comment. But Lauren Hochfelder, co-CEO of the bank’s $53 billion real estate group, said during a recent interview that the company had been moving away from office even before the pandemic due to how capital-intensive it is.
“You are constantly investing capital to get tenants and keep them in your building,” she said in an interview with CNBC in April. “We like assets where you can take cash out instead of putting it in.”
A Newmark team led by Adam Spies and Marcella Fasulo is handling the sales process.
Occupancy at 500 Park is 95 percent, with tenants including SLR Capital Partners, Georgetown Company and Friedland Properties. Last summer, fashion designer Vera Wang signed a lease at the building for nearly 27,000 square feet.
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The building was renovated in 2019.
Elsewhere, Morgan Stanley is looking to sell the San Antonio mall that it acquired for $100 million in 2021 after Simon Property defaulted on its loan.