NEW YORK CITY-L&L Holding Co. has acquired Lehman Brothers' interest in 425 Park Ave. for approximately $140 million. L&L Holding originally acquired the site in 2006—in partnership with Lehman—and has now secured long-term investment for the property. Eastdil Secured's Adam Spies, senior managing director and Joshua King, director, facilitated the transaction on behalf of the parties.
L&L plans to demolish the existing structure and replace it with a new 650,000-square-foot tower. It has retained Foster + Partners to build a 21st century office tower. The new building will be the only new structure of its kind in the area, notes David Levinson, L&L co-founder. “425 Park Avenue will be the first new block front building on Park Avenue in 50 years.” The property sits in the Plaza district, between 55th and 56th streets.
Foster's plans call for large, open spaces throughout the building that allow for flexible use, as well as three landscaped terraces with panoramic views of Manhattan. At street level, the design allows for a large civic plaza that could host major works of art. L&L Holding anticipates the start of construction in 2015 with the new tower to be completed by the end of 2017.
The building could host a variety of high-end tenant types, a spokesman tells GlobeSt.com. “David Levinson has suggested it would work well for international companies seeking a prestigious NYC address as well as the types of companies that have historically been attracted to that corridor –notably private equity firms, hedge funds and high end fashion conglomerates.
Ashish Gupta, SVP, Lehman Brothers real estate group, explains the transaction. “Over the last two years in particular, Lehman and L&L Holding have systemically de-risked the development opportunity by investing discretionary capital to fix several design and cost variables. The achievement of certain key predevelopment milestones, including the selection of Foster & Partners as the project architect, created a more defined project, which shifted the risk profile of the investment and allowed the partnership to complete a recapitalization that replaces Lehman's ownership interest with new, long-term capital alongside L&L Holding.”
He adds, “L&L Holding has been a prudent and effective development partner without whom Lehman could not have realized such a great outcome for its creditors.”
Says L&L co-founder Robert Lapidus, “We are excited and privileged to be developing a future iconic asset on Park Avenue that will redefine the modern office building experience,” said Lapidus.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
