Investor John Choi Pays Sachs Companies $36M for 65 West 55th Street
By Abigail Nehring June 27, 2024 2:23 pm
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Sachs Companies is cashing in on a one-of-kind, 13-story property the asset manager’s founders built more than a half-century ago, Commercial Observer has learned.
Korean investor John Choi paid Sachs $36 million, or $321.40 per square foot, to buy 65 West 55th Street in an all-cash deal, according to Rosewood Realty Group, which brokered the sale for Sachs.
That’s a 20 percent cut from the building’s $45 million valuation in June 2021, when one of Sachs’ subsidiaries sold it to another subsidiary as part of a restructuring of the company, property records show. A spokesperson for Sachs did not respond to a request for comment.
The 112,000-square-foot Plaza District building between Fifth Avenue and Avenue of the Americas contains office space on the second, third and fourth floors. The upper floors have 79 apartments, about half of which are rent-stabilized, according to Rosewood’s Ben Khakshoor, who arranged the deal for Sachs with Aaron Jungreis and Alex Fuchs.
“We found a very unique buyer,” Khakshoor said. “We actually had a bunch of offers, all around the same price range. This buyer had the strongest terms and was able to close quickly.”
Choi is not only deep-pocketed, but also somewhat enigmatic. It’s unclear how many properties Choi has across the country, but he runs a company that’s developing several projects in Los Angeles, according to Capital Property Partners’ Sterling Heatley, who represented him in the New York deal.
Heatley said the West 55th Street building caught Choi’s attention more than a year ago and he finally pulled the trigger once “it got to a price that was interesting.”
“It was a good intrinsic purchase in terms of price per square foot,” Heatley said. “And it has value-add potential because of the two office floors that could be turned into apartments.”
The deal is Choi’s first acquisition in New York, according to Heatley. He purchased the property through Bando Geny, a limited liability company registered in New York last month. Choi declined to comment on the deal.
About half of the building’s office space is currently vacant while three retail units on the ground floor are leased to long-term tenants, according to Rosewood. That helps explain the property’s 5.2 percent cap rate after the deal with Choi.
“The property offers tremendous value-add potential with the vacant office, and also the below-market retail leases,” Jungreis said in a statement. “Even in a volatile interest rate market, we were able to get this closed in less than a month.”
Khakshoor said Choi is considering either renovating the office portion of the building and leasing it to new tenants or converting the entire building to residential.
Update: This story has been updated to include a comment from the buyer broker.
Abigail Nehring can be reached at anehring@commercialobserver.com.
