ZG Capital, Rialto Buying Santander Midtown East Office Tower for $105M

The property will sell for $15 million less than it did in 2012

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A joint venture between Bobby Zar’s ZG Capital and Rialto Capital Management signed a $105 million contract to acquire a soon-to-be vacant building that has housed Santander’s New York headquarters, marking a 12.5 percent decrease from what the office tower last sold for a decade ago.

ZG and Rialto inked a deal last week to purchase 45 East 53rd Street from MEK Management Services with plans to implement $60 million of capital upgrades. The 134,000-square-foot Midtown East property will open to new tenants after Santender exits this fall as part of the Spanish banking giant’s plan to consolidate its offices at the 160,000-square-foot 437 Madison Avenue

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The New York Post first reported on the off-market deal, which is slated to close in 30 days. 

Newmark arranged and structured the equity joint venture with a team led by Jordan Roeschlaub, Dustin Stolly and Dan Fromm. 

MEK Management Services bought 45 East 53rd for $120 million from Santander in 2012 as part of a sale-leaseback deal. Santander opened the 20-story building in 1991 next to the landmarked Lever House, which is undergoing a $100 million renovation by co-owners Brookfield Properties and WatermanClark.

ZG and Rialto JV are looking to modernize the office asset with new amenities in order to attract full-floor boutique financial services tenants, sources told Commercial Observer. It marks the first New York City acquisition for Miami-based Rialto, which is run by Jay Mantz and Jeff Krasnoff.

Manhattan-based ZG Capital, an affiliate of The Zar Group, is led by Zar and James Tamborlane.

Representatives for ZG Capital, Rialto, MEK and Newmark did not immediately return requests for comment. 

Andrew Coen can be reached at acoen@commercialobserver.com