90 Fifth Avenue In Contract For $115 Million
Daniel Geiger July 11, 2012, 5:19 p.m.
90 Fifth Avenue is being acquired by the Atlanta based investment group Jamestown for $115 million sources have revealed to The Commercial Observer, a price that equates to a lofty over $800 per square foot.
The deal, if it closes, would finally end a years long effort to sell the 140,000-square-foot property, which is mostly occupied by the financial media company Forbes.
Owner RFR Realty had marketed the property several times in the past but failed to hit its ambitious pricing targets.
The success this time around appears to reflect the rise of Midtown South, the neighborhood where the building is located. Tenants, particularly tech companies and media and creative firms, have flocked to the area, driving up rents and pushing vacancy down to around four percent, the lowest level of any major office market in the country.
Jamestown is no stranger to the neighborhood or its potential. The company, a prominent investment firm in the city, owns Chelsea Market, a popular office building and retail destination in the area that the company is planning to expand.
Richard Baxter, a vice chairman at Jones Lang LaSalle, handled the deal for RFR. Mr. Baxter had attempted to sell the building in the past but hitting RFR chief executive Aby Rosen’s high expectations were difficult to achieve, especially when the neighborhood wasn’t as popular as it is now.
Mr. Baxter couldn’t be reached for comment, but in a conversation with this reporter last summer, he said that Mr. Rosen, a prominent owner in the city who holds the Seagram Building and the Gramercy Hotel, would hold out for at least $800 per square foot. A deal appeared set a year ago for that price with an overseas buyer but the arrangement fizzled when the building’s lender, JP Morgan Chase, balked at having a foreign owner assume the debt. Assuming the debt is necessary in any sales deal for the building because its mortgage contains onerous prepayment penalties.
A call to Jamestown wasn’t returned by press time.
The company has several options with the property. Forbes’s lease continues for several more years and the property could continue to serve as an office building. It also is possible to convert it to residential a source said.