New York City’s Top 10 Investment Sales of 2021
There won’t be a billion-dollar building sale in New York City in 2021. That’s not a surprise. The city didn’t notch one in 2020, either (though it came awfully close with Amazon’s $978 million purchase of the former Lord & Taylor flagship at 424 Fifth Avenue).
You have to go back to 2019 to find a 10-figure investment sales deal in the five boroughs: WarnerMedia’s $2.2 billion sale-leaseback of its office condominium units at 30 Hudson Yards.
Yes, the story of New York investment sales the past two years is one of volatility and decline, all due to the pandemic. Certain asset classes — hotels, stand-alone retail, office towers, especially of the non-Class A variety — just aren’t in as much demand due to the uncertainty that COVID-19 has wrought upon their sectors. Certain others — especially warehouses, due to the e-commerce boom, and, of late, multifamily — are very much in demand, but not enough to lift the entire market by themselves.
Still, should COVID continue to recede behind vaccinations and New York continue to open up behind renewed tourism and more in-office work (and inflation continue to spook investors seeking a safer hedge against it in real estate), investment sales figures, prices and otherwise, should pick up too. Already, 2021’s number of major investment sales in Manhattan south of 96th Street — a projected 187 — is expected to beat 2020’s total of 160, according to brokerage Avison Young.
And that billion-dollar drought is very, very likely to end in 2022. That’s because Google’s $2.1 billion purchase of its St. John’s Terminal workplace in Manhattan is expected to close in the first three months of the year.
In the meantime, the following 10 investment sales — all trades involving buildings and all but one in Manhattan — were the largest by dollar total in the five boroughs in 2021. They reflect closed property deals. The data comes largely from PropertyShark, a New York-based real estate data provider, and was checked against public records and media reports. Brokers who worked on these deals are listed where details were available.
Commercial Observer staff contributed to reporting.
51 West 52nd Street
The sale of CBS’ headquarters building, known as Black Rock, which closed in October, was the biggest New York City investment sale of 2021. Real estate investment and management firm Harbor Group International bought the 38-story tower with 817,000 square feet of office space from ViacomCBS, which retained 11 floors for its offices. The new owner quickly announced plans to upgrade the building — which is in keeping with a general amenities arms race among New York owners hoping to draw and retain tenants post-COVID.
Darcy Stacom and Bill Shanahan of CBRE represented the seller in the deal; it remains unclear who repped Harbor Group, which used $558 million in commercial mortgage-backed securities financing for the purchase. Deutsche Bank led that financing transaction, with Goldman Sachs and Brookfield Real Estate Finance also participating.
54 Noll Street and 123 Melrose Street
This is the only non-Manhattan entry on the list, and it comes via a bankruptcy plan for developer All Year Management. The 911-unit residential complex on the former site of the Rheingold Brewery in Bushwick, Brooklyn — known as Denizen — was one of All Year’s most high-profile projects. But a lender’s foreclosure attempt on a $65 million mezzanine loan on the 123 Melrose Street part of the project — amid other financial challenges for the firm — forced All Year’s hand. Atlas Capital Group picked up the project in early December. Square Mile Capital provided $367.5 million in acquisition financing, according to Meridian Capital Group.
265-275 Cherry Street
The Related Companies, one of the largest and most active owners and developers in New York City, closed on its purchase of two Section 8 apartment complexes in Manhattan’s Two Bridges area in January. The buildings contain 490 residential units and two commercial units. Related bought the buildings from a venture between CIM Group and L+M Development. Cushman & Wakefield’s Adam Spies, Doug Harmon, Josh King, Adam Doneger, Marcella Fasulo and Kevin Donner negotiated the sale for both sides.
635-641 Avenue of the Americas
The deal for these two office buildings, spanning nearly 270,000 square feet, closed in June. SL Green Realty Corp., New York City’s largest office landlord, sold the properties to San Francisco-based Spear Street Capital. SL Green had redeveloped the assets in the middle of the decade, and they were 94 percent leased as of the sale, according to a release from the company — no small deal sweetener given the spiking office vacancy rates in Manhattan at the time. CBRE’s Darcy Stacom, Bill Shanahan and Doug Middleton repped SL Green in the transaction.
Privately owned Northwood Investors bought these two buildings, totalling more than 232,000 square feet, in a deal that closed in June. The seller was a family that had owned them since the late 1980s, according to The Wall Street Journal. The buildings contain office and retail space, including for the iconic Balthazar restaurant. The properties were marketed by Cushman & Wakefield’s Doug Harmon, Kevin Donner and Benjamin Lushing. A Cushman team of Gideon Gil, Steve Kohn, Alex Hernandez and Lauren Kaufman also negotiated $227 million in acquisition financing from Ares Commercial Real Estate on behalf of Northwood.
One Madison Avenue
This was another SL Green Realty Corp. deal, this time for the sale of a 25 percent stake in the under-development One Madison Avenue. The sale, which involves committing total equity of at least $259.3 million, closed in December. SL Green described the buyer only as “an international investor.” The REIT retained a 25.5 percent stake in the 27-story, 1.4 million-square-foot One Madison, which it is co-developing with Hines. Hines and the National Pension Service of Korea kept their 49.5 percent stake in the office project, which is supposed to wrap within 23 months. SL Green had bought the fee interest in the previous iteration of One Madison from MetLife for $918 million in 2005.
111 Wall Street
A joint venture between Nightingale Properties and Wafra Capital Partners closed in June on a purchase of the land under this 25-story office building spanning approximately 1.2 million square feet. The deal closed nearly a year and a half after the venture bought the leasehold. Not unsurprisingly, too, that June 2021 close also came mere weeks after Nightingale and Wafra secured $500 million in acquisition and construction financing from a consortium that included SKW Funding, PIMCO, Oaktree Capital and Bain Capital. (Newmark’s Dustin Stolly, Jordan Roeschlaub and Nick Scribani brokered that financing deal.) The new owners are planning a revamp of the building into more amenitized Class A office space.
530 Fifth Avenue
This is the biggest strictly retail investment sale of the pandemic so far. It’s also perhaps emblematic of retail’s travails during the tumult. Brookfield Property Partners sold the pair of retail condominium units totaling 59,839 square feet at 530 Fifth Avenue for well under what the two last traded for in 2014. That was when General Growth Properties (GGP) and Thor Equities paid $295 million. Brookfield bought out GGP in 2018 in a nearly $250 million deal. The buyer of the block-long property this go-round was a joint venture between Aurora Capital Associates and Edmund M. Safra. Cushman & Wakefield’s Adam Spies, Kevin Donner, Marcella Fasulo, Doug Harmon, Adam Doneger, Josh King and Benjamin Lushing brokered the sale, which closed in November.
909 Third Avenue
This was another land deal. The 601w Companies closed on a sale of the fee interest at 909 Third Avenue in June. The buyer was affiliated with Colonnade Management. Vornado Realty Trust signed a ground lease in 1999 for the 32-story tower that has more than 1.3 million square feet; that lease expires in 2033. Incidentally, The 601w Companies was involved in one of the largest investment sales deals of 2020: It purchased the Amazon-anchored office building at 410 10th Avenue from SL Green Realty Corp. in December of that year for $952.5 million.
Japan-based retailer Uniqlo closed on a deal in June for the building that’s housed its U.S. flagship since 2006. Uniqlo purchased the 100,250-square-foot property — of which it occupies more than half — from AB & Sons, controlled by Isaac, Eli and Abraham Chetrit. The sale isthe most prominent example of a mini-trend of 2021: retail tenants in the New York area buying their spaces rather than renting (office tenants got in on the action, too, with Google’s St. John’s Terminal purchase, set to close in early 2022, the most prominent example there).