Fisher Brothers is set to recapitalize another big Midtown office tower.
Fresh off its $1.1 billion recap of Park Avenue Plaza, the family firm is planning to take on a new partner at 605 Third Avenue — eyeing a valuation of $425 million.
The Fishers’ partner, JPMorgan Asset Management, is looking to sell its 49-percent stake in the 43-story, 1 million-square-foot tower, The Real Deal has learned.
“The new investor will partner with Fisher Brothers … to execute a strategic repositioning to elevate the Property into the top-tier of the Grand Central competitive set,” reads an offering memo from Newmark.
The building is 84 percent leased, and the business plan of re-marking rents on expiring leases projects income to climb 60 percent over the next five years.
“As part of our ownership strategy, we’re exploring opportunities to bring in a minority partner for 605 Third Avenue while maintaining our majority ownership,” a spokesperson for Fisher Brothers told TRD. “As a flagship asset in our portfolio for decades, this anticipated joint venture reflects our long-term confidence in both the property and the corridor.”
A spokesperson for JPMorgan declined to comment. A Newmark team led by Adam Spies and Josh King is overseeing the sales process.
This is at least the second time JPMorgan’s asset management arm — led by CEO George C.W. Gatch — has tried to sell its stake.
The company put its position up for sale in October 2020 at a time when investors were still trying to figure out how the early days of Covid would impact office sales. At the time, the building was 97 percent leased and JPMorgan was looking for a valuation around $600 million.
Fast forward six years and there’s a sense that the impact of work from home on office valuations has bottomed out.
The recovery, though, isn’t completely even. Prime areas like Park Avenue and Madison Avenue are essentially full, with vacancy rates of 6.5 percent and 11.5 percent, respectively, according to Colliers. Third Avenue, on the other hand, has a rate of 20.3 percent.
Nearby, SL Green has put its 600,000-square-foot office building at 711 Third Avenue up for sale targeting a price of $160 millioin, also with Newmark.
Fisher Brothers in April recapped its Park Avenue Plaza tower at 55 East 52nd Street when Vornado Realty Trust bought the 49 percent stake owned by billionaire Chinese developer Zhang Xin’s Closer Properties.
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