NEW YORK CITY—Blackstone Group has agreed to sell a midtown Manhattan office tower for about $2.25 billion, according to the Wall Street Journal. The buyer of the asset, 1095 Ave. of the Americas, is a venture led by Canadian property investor Ivanhoé Cambridge.
Brokered by Eastdil Secured, GlobeSt.com has confirmed, the deal was done at approximately a 4.5% capitalization rate, Bloomberg News reports. An Eastdil source and a spokesman for Ivanhoe declined to comment. Representatives of Blackstone did not respond to requests for comment by press time.
If completed, the trade of 1095 Ave. of the Americas would be the second-most-expensive sale of a single office building in US history, trailing only the sale of the General Motors building for $2.8 billion in 2008
The sale of the 1.2 million square-foot tower underscores the fact that foreign investors have become the dominant buyers of top-quality real estate within major American cities, the Journal notes. In the past year, foreign investors repeatedly have bought shares of iconic office towers like Time Warner Inc.'s headquarters and 601 Lexington Ave., the former Citicorp Center, as their interest in commercial property—particularly in New York City—grows.
Ivanhoé, the real-estate arm of public pension-fund manager Caisse de Dépôt et Placement du Québec, has been a leading foreign investor, buying skyscrapers in Seattle and New York. Its partner on those deals and the 1095 Avenue of the Americas deal is Callahan Capital Partners.
For Blackstone, the deal is the private equity giant's latest move to sell the assets it still holds as a result of its $39 billion leveraged buyout of Sam Zell's Equity Office Properties Trust in 2007, along with earlier acquisitions in 2006 and 2005.
Earlier this year, the New York private-equity firm sold a set of Boston skyscrapers for more than $2 billion to Canadian investor Oxford Properties Group and the asset-management arm of J.P. Morgan Chase & Co., and it recently sold a set of Silicon Valley office buildings to Google Inc.
At 1095 Ave. of the Americas, the deal ends years of redevelopment of a building that once was occupied by Verizon. But Blackstone redeveloped the building, stripping it down to its steel and cladding it with a shiny green glass that stands out on the edge of Bryant Park.
At the same time, it embarked on a major redevelopment of the retail, adding new space in distinctive clear glass boxes to which it lured tenants like Whole Foods and Asics. The building is now about 95% leased.
For Ivanhoé and Callahan, the deal adds to their growing midtown Manhattan portfolio. Among other buildings, the companies own 1411 Broadway and 1211 Ave. of the Americas, home of the Wall Street Journal and News Corp. Eastil brokered those deals as well.
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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.
