NEW YORK CITY— Deutsche Finance America; BLG Capital, a division of the Turkish conglomerate Bilgili Group; and developer Michael Shvo have acquired the 100,000 square feet of vacant office space at 685 Fifth Ave. for $135 million.
Yigit Burak Ozkan, an associate at BLG, tells GlobeSt.com that the seller is GGP, the Chicago-headquartered, publicly-traded REIT that invests in shopping centers. Brookfield Property Partners is acquiring GGP for $9.25 billion. He says the recent sale is for the entire building except the retail area, which will be retained by GGP.
BLG states that a joint venture of institutional investors led by the Deutche Finance Group subsidiary and BLG raised $155 million of equity for the acquisition and development and will seek $100 million of debt financing to fully capitalize the project.
BLG says the joint venture also includes Bayerische Versorgungskammer, Germany's largest manager of public pension schemes, investing through a fund administered by Universal-Investment, the Versicherungskammer Bayern Group, the largest public insurer in Germany, another Munich-based insurer and institutional real estate funds managed by Deutsche Finance Group.
The New York Post reported the buyers include BLG, Deutsche Finance America, and developer Michael Shvo, the Wings group and Latner Partners. The paper notes they are purchasing the fifth through the 20th floors, and intend to add five floors, create luxury rental condominiums and possibly a hotel.
"685 Fifth Avenue is an iconic piece of real estate in an irreplaceable location and I am very excited about its potential for redevelopment,” says Sven Neubauer, chief investment officer at Deutsche Finance Group. ”I am also very pleased to announce the market entry of Deutsche Finance America, our subsidiary focused on direct investments in the United States, with such a high-profile project."
BLG Capital, a private equity real estate company located in Istanbul, Turkey, primarily focuses on real estate assets in Turkey and adjacent geographies. Serdar Bilgili, the company's chairman says BLG is looking to diversify its portfolio with carefully selected investments in the global real estate market. “The transaction marks an important strategic partnership between the firms, which are looking to grow their portfolio further in other global hubs, having previously invested in several projects in Istanbul and now in New York,” he adds.
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Betsy Kim
Betsy Kim was the bureau chief, East Coast, and New York City reporter for Real Estate Forum and GlobeSt.com. As a lawyer and journalist, Betsy has worked as the director of editorial and content for LexisNexis Lawyers.com, a TV/multi-media journalist for NBC and CBS affiliated TV stations in the Midwest, and an associate producer at Court TV.
