Boston Properties Buying 360 Park Avenue South Leasehold: Sources
By Celia Young May 25, 2021 12:40 pm
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Boston Properties is buying the leasehold interest in Enterprise Asset Management’s 360 Park Avenue South building for $300 million, sources told Commercial Observer.
The acquisition includes a number of operating partnership units, provided at market, which can be converted into Boston Properties common stock, also known as a UPREIT arrangement — bringing the value of the purchase above $325 million, according to a source familiar with the deal.
The 470,000-square-foot building will be vacant at the end of the year when the 20-year master lease, held by business information company RELX, expires. Enterprise was looking to offload the ground lease on the 20-story office building in March and was open to considering a full sale of the building, The Real Deal reported.
Boston Properties officials did not immediately respond to a request for comment.
Located on the southwest corner of East 26th Street, the building offers 23,000-square-foot floors and sits across from Madison Square Park.
The purchase represents a solid bet on Manhattan office space, where demand has grown in 2021, but still has not returned to pre-pandemic levels. While office leasing picked up by 9.4 percent in Manhattan during the first three months of 2021, the market remained far lower than in 2019, before the coronavirus pandemic hit, CO reported.
Enterprise has owned the 360 Park Avenue South building since the 1960s and has a securitized mortgage on the property with a balance of $204 million that matures next year. Boston Properties has not made a final decision on financing, according to a source.
Prior to the pandemic, a property right across the street — 345 Park Avenue South — sold to medical fund manager Deerfield for $345 million, which plans to convert the building into a life sciences hub.
Enterprise was founded by Meyer Steinberg, who died in 2003, and his four daughters now own the company. A representative from Enterprise could not immediately be reached for comment.
A CBRE brokerage team of Darcy Stacom, Bill Shanahan and Doug Middleton brokered the deal. The CBRE brokers did not immediately respond to requests for comment.
With additional reporting from Cathy Cunningham.
