Williams Equities Buys Midtown South Building for $147M

Williams Equities appears to have scored a bargain in Midtown South, picking up a boutique office building for a fraction of what it cost the sellers to purchase seven years ago.

Williams bought the 300,000-square-foot property at 470 Park Avenue South for $147.5 million, the New York Post reported, 40 percent less than its last sale price. The deal breaks down to $492 per square foot.

The sellers of the blockfront property between East 31st and East 32nd streets were Steven Pozycki’s SJP Properties and PGIM Real Estate, an affiliate of Prudential Financial. They bought the property in 2018 for $245 million and reportedly invested $15 million, installing a roof terrace, ground-floor lounge and landscaped courtyard.

Considering the renovation and the discount, it’s hard to think PGIM and SJP didn’t take a significant hit on the deal. Williams principal Michael Cohen said the adjustment in building values in a “post-pandemic interest rate and cap rate environment” are “not in any way reflective of the values of a building.”

Tenants who recently signed deals at the property include British sports streaming service DAZN and financial platform Anchorage Digital. Williams plans to market upcoming office space for somewhere between the low $70s and low $80s per square foot; about 45 percent of the office space is expected to be available soon.

Williams is set to replace a $56 million mortgage provided by MetLife Real Estate Lending with its own mortgage loan, but Cohen didn’t share details of the financing. Eastdil Secured’s Gary Phillips and Will Silverman advised the sellers on the deal.

In October, Williams Equities sold 655 Madison Avenue to Gary Barnett’s Extell Development for $160 million. The office property is slated for demolition and a residential conversion is expected.

PGIM was also on the selling end of a New York deal in October. Canvas Investment Partners paid $104.5 million to PGIM for an apartment complex in Gramercy Park, taking a loss in the process, albeit a much smaller one than at 470 Park Avenue South.

That same month, SJP signed British company PATH Entertainment Group to a 50,000-square-foot lease at 11 Times Square, which will ultimately house an immersive experience from the creators of Monopoly Lifesized.

— Holden Walter-Warner