Morgan Stanley Sells 2 Park Avenue for $360M

Morgan Stanley is taking a steep loss in a big deal for a Midtown South office building.

The investment banking company is selling 2 Park Avenue to Haddad Brands for $360 million, the Commercial Observer reported. The deal for the 1-million-square-foot property breaks down to $360 per square foot. The sale has yet to close, but would be one of the city’s largest office investment sales of the year if it lands in the next two weeks.

Morgan Stanley paid significantly more when it purchased the property from a venture including L&L Holding Company in 2007. That deal unfolded for $519 million. Since then, the Great Recession and the pandemic have wreaked havoc on the office market.

Haddad Brands is a privately held family business in the apparel and accessories industries, designing products for the likes of Nike, Converse, Ralph Lauren and Jordan. The company is expected to occupy the 28-story building’s office space. In doing so, it will be the latest in a line of owner-occupants emerging in Manhattan’s office market this year.

About a year ago, Kering — Gucci’s parent company — and Prada snapped up properties along Fifth Avenue, paying $963 million and $835 million for the buildings, respectively. Other owner-occupants closing deals in Manhattan include Hyundai Motor Group, while Ikea and Uniqlo have taken stakes in flagship properties.

Newmark’s Adam Spies and Doug Harmon were part of the team representing the seller in the 2 Park Avenue transaction.

The sale is the second by Morgan Stanley on Park Avenue in recent weeks. Last month, prominent office landlord SL Green acquired the office condo portion of 500 Park Avenue from the investment bank for $130 million. The trade of the 201,000-square-foot office condo broke down to $647 per square foot; Spies and Harmon also advised on that deal.

— Holden Walter-Warner