NEW YORK CITY—The landmark office tower known as the Helmsley Building is up for sale, and industry watchers say the property could bring in more than $1.1 billion, according to Bloomberg. The 1.4 million-square-foot skyscraper straddles Park avenue and sits just north of Grand Central Terminal.
The property is being put on the market by Invesco Ltd. and Monday Properties, Darcy Stacom, vice chairman at CBRE—which is representing the owners—says. South Korea's National Pension Service also reportedly has a stake in the property.
The Helmsley Building “is a great below-replacement-cost play, a great value play at the most irreplaceable location you can get,” Stacom says.
The tower may sell for at least $800 per square foot, which would put its value at more than $1.1 billion, according to someone with knowledge of the offering. By contrast, in 2011, Invesco and National Pension bought their interests in the building for at $635 a square foot, Bloomberg reports. Prior to that transaction, the asset was held by a joint venture between Goldman Sachs Group Inc., GE Capital and Lehman Brothers Holdings Inc.
Today, 230 Park Ave., is about 94% occupied and almost $200 million of capital improvements have been made to the tower in the 16 years that Monday Properties has been an investor in the property, reports CEO Anthony Westreich.
“The building's rents are approximately 15 percent below market,” he tells Bloomberg. “Bringing those rents to the market rate will boost the cash flow and boost the value of the building.”
A $350 million New York Life Insurance Co. senior mortgage was taken on the building in 2011 and matures in 2018, according to industry data. A buyer would have the option to replace the financing, Stacom notes.
The Beaux Arts tower was built by the New York Central Railroad Co. asto serve as its headquarters in the 1920s, Bloomberg reports. The building was later sold to Harry Helmsley, who renamed the asset after himself.
Stacom reveals ideas for several possible revenue streams that an investor in the building could create.
The building's ground-floor retail space, which totals about 70,000 square feet, could be improved and/or enlarged, she says. The tower also has a pair of arcades between the train terminal and Park Avenue, through which thousands of commuters stream daily, so the value of signs in the passageway could be increased.
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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.
