Chicago-based investors Walton Street beat out a crowded field of bidders with its reported $266-million bid, subsequently hiring Cushman & Wakefield to handle leasing and management duties at the 450,000-sf property. But Shorenstein officials vehemently deny a local newspaper's allegations that Shorenstein bid on the building. Furthermore, the firm denies that it lost its leasing and management contract for the property, as the story indicates, saying it resigned the assignment prior to Yale University Investments' sale of the asset.
In a statement released exclusively to GlobeSt.com yesterday afternoon, Shorenstein officials said, "A report in the NY Post Tuesday (10.29.02) suggested that Shorenstein Company had attempted to purchase 717 Fifth Avenue and also had competed to retain leasing and management services for the building. Both of these suggestions are inaccurate.
"In fact, as was widely-reported at the time, in October of 2001, Shorenstein announced their decision to terminate their third party leasing and management contracts in order to focus exclusively on investments on behalf of a series of closed-end funds sponsored by Shorenstein and on the leasing and management of assets owned by these funds.
"In September of 2001, Shorenstein had closed its sixth and largest closed-end fund and was already managing and leasing its own portfolio exceeding 25 million square feet. In October of 2001, Shorenstein indicated to all of its third party clients that they would work with the owners' timetables to ensure a smooth transition into new management. For the Met Life portfolio, including 200 Park Avenue and 551 Fifth Avenue, Shorenstein and Met Life agreed that the appropriate transition time was at year-end of 2001. At the time, the owner of 717 Fifth Avenue was actively evaluating the potential sale of the property and requested that Shorenstein continue as managing and leasing agent through the completion of the sale. At the time, the building was placed on the market, Shorenstein made the early determination that 717 Fifth Avenue was not an appropriate investment for their investment funds and as a result did not pursue it as an acquisition opportunity.
"Shorenstein is pleased that its longstanding client was able to conclude a very favorable sale of 717 Fifth Avenue and that Shorenstein is now able to complete its own plan to completely exit the third party leasing and management business.
Shorenstein's decision to drop its third party leasing and management operations was reported by GlobeSt.com in November 2001. (Read earlier story.) This summer, however, a Shorenstein spokesperson told GlobeSt.com that Shorenstein intended to retain its contracts at 717 Fifth Ave. following the sale. Yesterday, a Shorenstein spokesman said the earlier statement was made by a misinformed employee.
According to C&W president of US operations Bruce Mosler, the competition to lease and manage 717 Fifth Ave. was stiff, though the process of choosing a firm was fairly quick. "Walton had clearly narrowed the field down to the contenders that they felt had the necessary resources," Mosler tells GlobeSt.com. "Then, since there were several, it was a function of looking at which organizations were willing to put their best resources on the table. It wasn't a long process."
Mosler says it was an all-out push by Cushman that put the firm over the top. "I think it was the depth and breadth of Cushman & Wakefield's core services that won the day," Mosler says. "Beginning with the senior broker's leadership and track record, and extending to the strategic agency services group, [which will] position the asset long term. Today it's all of these selling as one that convinces tenants to come to the table."
Yale University Investments was unavailable for comment by press time.
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