In another whopping example of large real estate owners seeking to capitalize on current market conditions by unloading top-shelf inventory, Boston Properties has reportedly sold its 23-story office building at 125 West 55th Street for $470 million to J.P. Morgan Asset Management.
The deal follows a string of other Class A building sales this year – 550 Madison Avenue, 30 Rockefeller Plaza, 237 Park Avenue and 75 Rockefeller Plaza – which accounted for $3.8 billion of the city’s first quarter dollar volume and created a 46% year-over-year jump, according to data from Avison Young.
Following RXR Realty’s $700 million acquisition of 450 Lexington Avenue last year, six of the firm’s top executives met with sellers Daniel Saliba and Mark Troy of Istithmar World Capital for a closing dinner at Lavo, the Italian restaurant on Manhattan’s East Side.
A round of toasts that evening, most agreed, was in stark contrast Read More
Scott Rechler’s RXR Realty has signed a 99-year triple-net lease at British department store tycoon Mohamed Al Faye’s 75 Rockefeller Plaza in Midtown Manhattan, where it plans to undertake a major capital improvement to reposition the building.
The 33-story building will be fully vacated by Time Warner Cable in 2014, leaving behind roughly 630,000 square feet of rentable area, and the renovations will include a new lobby and a restoration of its landmarked, classic limestone façade, executives at RXR said.
Built by the Rockefeller family in the 1930s, Rockefeller Center is one of the largest commercial real estate developments to be built in the past century. Initially spanning approximately two dozen buildings, 22 acres and over 8,000,000 square feet, the district has further expanded in recent years to include a few dozen additional buildings along the Sixth Avenue corridor.
“There has also been a significant slowdown of leasing along the Sixth Avenue corridor, particularly Class A leasing, where leasing in the first half of 2012 was about half the long-term average,” said Melissa Bazar, an executive director at Cushman & Wakefield. “Since the Sixth Avenue corridor is dominated by large corporate users and financial firms, we expect leasing to remain sluggish through the balance of 2012, below the long-term average.”
Inventory has increased from 9.3 percent to 10.5 percent this past year, according to Cushman & Wakefield’s third-quarter report.
Facing an impending lease expiration at 75 Rockefeller Plaza, Warner Music is in the market exploring its options, sources say, including a potential consolidation into 1290 Avenue of the Americas where its label Atlantic Records already has offices.
RXR Realty has moved into the lead in an auction to take control of 75 Rockefeller Plaza several sources familiar with the bidding told The Commercial Observer.
A source who had participated in the bid for the tower told The CO that the price of the deal, which is being structured as a leasehold, had moved to around $17 million per year in the latter rounds of the auction – though it could not be immediately confirmed whether RXR had agreed to pay this price or if the company had advanced to the point where it would close on the deal.
George Comfort & Sons is in talks to buy 75 Rockefeller Plaza, several sources with direct knowledge of the deal told The Commercial Observer.
The price nor the structure of the transaction was immediately available. The billionaire Mohamed Al Fayed, a former owner of the Britain-based department store company House of Frasier, owns the 600,000-square-foot tower and when he put the property on the market at the beginning of the year had wanted to arrange the sale as a leasehold interest.
Investment Sales 2012
The investment sales market, most brokers agree, has been heating up over the past 12 months. Approximately $25.8 billion in commercial properties changed hands last year, a turnaround that represented an 88 percent increase over 2010. But while the positive uptick is easily verifiable, what happens next for Manhattan’s investment sales market is still up in the air.
Accordingly, The Commercial Observer set out to speak with the real estate industry’s most accomplished capital markets and sales practitioners to learn what’s in store for 2012. Over the next several days, we’ll post interviews with heavy hitters like Darcy Stacom and William Shanahan of CBRE, J.D. Parker of Marcus & Millichap, Woody Heller of Studley and Peter Hausperg of Eastern Consolidated. But, first, after the jump, none other than Richard Baxter of Jones Lang LaSalle.
On the Market
The real estate investor and British department store tycoon Mohamed Al Fayed is exploring a sale of the Manhattan office tower 75 Rockefeller Plaza.
According to executives who have been briefed on the offering, Mr. Al Fayed is aiming to negotiate a leasehold of the property in which he would continue to own the land under the 600,000-square-foot building and collect rent but put control of the asset in the hands of an investor.