GDS and Sabal Pick Up Controlling Stake in Metropolitan Tower for $82.6M
By Abigail Nehring March 27, 2024 4:45 pm
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GDS Development Management and Sabal Investment Holdings picked up a controlling stake in the office portion of Manhattan’s Metropolitan Tower for $82.6 million, according to property records made public Tuesday.
The pair have been poised to take control of the office condominium portion of 146 West 57th Street since November from L&L Holding and Mitsubishi, when GDS and Sabal announced a joint venture with German lender Aareal Group to acquire the distressed debt tied to the Plaza District tower.
The 77-story tower contains an 18-story office condominium spanning a total of 237,695 square feet. The tower also contains 240 residential condos, which are not part of the deal.
L&L acquired a stake in the office condo in 2006 with BlackRock, according to property records and The Real Deal. Mitsubishi paid $163 million to buy BlackRock’s majority stake in the condo in 2016, leaving L&L with a 1 percent interest, TRD reported.
The owners refinanced their debt tied to the office condo with a $92.5 million loan from Aareal Group in 2021.
L&L and Mitsubishi defaulted on that mortgage last April, as Commercial Observer previously reported. The default on a premier office property in Manhattan’s most expensive submarket was a worrying sign for the market, and it left the door open for Aareal to sell off the nonperforming debt or pursue foreclosure.
And GDS and Sabal were happy to step up to the plate.
“We are believers in the continued recovery of Manhattan’s office and retail market and are pleased to partner again with Sabal on this iconic project in the city,” GDS co-founder Alan Rudikoff said in a statement in November.
After picking up the debt in November, the partners closed the deal to buy L&L and Mitsubishi’s position on March 18, completing the final step in the process of acquiring the former owners’ equity in the property. The deal was first reported by PincusCo.
The building has been the headquarters of L&L and is currently about 60 percent leased, according to a source with knowledge of the deal.
Newmark (NMRK)’s Adam Spies, Adam Doneger, Christopher Kramer and Evan Layne arranged the sale and declined to comment.
Representatives for GDS and Sabal did not respond to requests for comment. A spokesperson for Aareal declined to comment.
Abigail Nehring can be reached at anehring@commercialobserver.com.
