A boutique office building in Midtown South has been purchased by Williams Equities for just over half its most recent sale price, Realty Check has learned. But there may be more to understanding this deal than the price tag suggests.
Williams paid just $147.5 million for 470 Park Avenue South, a historic 300,000-square-foot property occupying the entire West Block front between East 31st and 32nd Streets. The seller was Stephen J. Posicki's SJP Properties and PGIM Real Estate, an affiliate of Prudential Financial, which acquired it in 2018 for $245 million.
However, the low purchase price Williams paid was due to a basement bargain sale, as he infamously sold 135 West 50th Street for $8.5 million, which had previously been sold for $332 million. It does not necessarily reflect recent market phenomena.
Asked to comment on 470 Park Avenue South's seemingly low price, Williams President Michael Cohen said, “We're in a post-pandemic interest rate and cap rate environment right now, and we're in a position where we're going to see more interest rates and cap rates in 2019 and over 10 years.'' “It's very different from anything that existed before.” 20 years ago. The result was a significant adjustment in value that did not reflect the value of the building at all. ”
City Finance Department records show there is a $56 million mortgage on 470 Park Avenue South.
From MetLife Real Estate Financing. Cohen told us he “financed the acquisition with a new mortgage” to replace the old mortgage, but could not disclose terms or other details pending lender approval.
Cohen added, “Our predecessors have done a great job managing the building.”
SJP and PGIM have invested heavily in a new rooftop terrace, ground floor lounge and landscaped courtyard. The upgrade helped attract recently signed tenants, including British sports streaming service DAZN and financial platform Anchorage Digital.
Cohen said about 45% of the office space will soon be for sale in the low $70s to low $80s per square foot, and at least one block will have more than 50,000 square feet available. Ta.
Built in 1912, the property consists of two interconnected buildings of 12 and 18 stories. Formerly known as the Silk Building for its silk importer tenant directory, this is an unusual investment for SJP, primarily known as the developer of major projects such as 11 Times Square and 200 Amsterdam Avenue. did.
But 470 Park Avenue South sits comfortably within an architecturally impressive old building that Cohen called Williams Equities' “sweet spot.” Williams is bringing new life to several other properties in its Midtown South portfolio, including 136 Madison Avenue, where it recently completed a 57,000-square-foot lease, and 28th Street and 40 West 23rd Street. Infused.
Williams is planning a major capital improvement program at the West 23rd Street site, including an updated atrium and skylights, and a building-wide rooftop deck above 28th Street.
