NEW YORK CITY—Surprising other potential bidders, real estate investor David Werner has signed a contract to buy the Mobil building on East 42nd street for more than $900 million, according to the Wall Street Journal.
The notoriously tight-lipped Werner was represented in the deal by Doug Harmon, senior managing director, Eastdil Secured, who did not respond to a request for comment. The seller, notes the Journal, technically was Hiro Real Estate LLC, a unit of a Japanese company, but Goldman Sachs Group was key to the deal because it reportedly holds the debt on the building. The investment bank declined to comment.
Another element of the deal is the fact that the building is technically a lease hold. The land is owned by the Goelet family, which reportedly has agreed to extend the ground lease for another 99 years. It previously was scheduled to expire in 2028.
In speaking to the Journal, Harmon says Werner beat out the competition for several reasons. “It's a combination of price, surety and speed. [Werner and his team] doesn't have to go through committees. They can at times outmaneuver institutional capital." Harmon's partner, senior managing director Adam Spies, also represented the buyer.
Bids were not due until Thursday but Werner beat other prospective buyers to the punch with a strong offer last week. There was widespread interest in the 1.8 million-square-foot trophy building across the investment community from sovereign wealth funds, pension funds and REITs. Tenants include the New York headquarters operation of Wells Fargo & Co.
Built in the 1950s as the headquarters of what was then Socony Mobil Oil Co., the stainless steel building sits across the street from the Chrysler building and spans the block between Lexington and Third avenues. It was vacated by what is now known as Exxon Mobil Corp. back when the city suffered a big corporate exodus in the 1970s and 1980s.
Best known for buying major trophy assets along the lines of the Newsweek building, at 1775 Broadway, Werner also is reportedly negotiating to acquire 5 Times Square for over $1.5 billion. Eastdil Secured's Harmon is said to be the broker on that assignment.
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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.
