Empire Capital Buys Fifth Avenue Office Tower

A venerable Fifth Avenue office tower that Silverstein Properties has owned for 45 years changed hands this week, as Empire Capital Holdings agreed to acquire the building at 529 Fifth Avenue for $105M.

The 20-story building, which encompasses 254K SF and 27K SF of retail space, sits a few blocks north of Grand Central Terminal. Newmark arranged the sale and is securing acquisition financing for Empire Capital.

Silverstein, who refinanced the property for $171M in October 2020, recently started a $20M renovation, including the addition of an amenity floor and a 500 SF terrace.

The building is 63% occupied. Office tenants include SDC Designs, the International Federation of Accountants and EZE Castle Integration, with leases expiring between 2027 and 2033. The corner ground-floor retail space in the tower, which was built in 1958, is leased to Wonderland Dreams on a lease that runs until 2025.

In November, Empire Capital closed on a $320M purchase of 1330 Sixth Avenue, a 40-story tower owned by RXR and Blackstone, in a venture that included Hakimian Capital.

Silverstein Properties is in the midst of the largest office-to-residential conversion in NYC, a project involving a tower at 55 Broad Street in Manhattan’s Financial District. Silverstein is partnering with Metro Loft Management on the adaptive reuse project.

Last week, a tenant at 55 Broad filed a lawsuit seeking to block the conversion project, claiming it’s a violation of their lease. The tenant trying to block the residential conversion is a residential landlord who has an 11K SF office in the building: Solstice Residential Group.

In the lawsuit, Solstice branded the adaptive reuse project “extremely disruptive and dangerous” to the company.

The lawsuit also names Rudin Management Co., claiming Rudin was aware of Silverstein and Metro Loft’s plans to convert the building into 571 apartment units when the developers bought the building in May. The partners paid $180M for the 30-story tower, in a deal expected to close this month.

Building rules outlined in Solstice’s lease stated that no tenant could use its space for residential purposes. According to the lawsuit, Solstice said Rudin had agreed that the landlord would not redevelop 55 Broad into something other than an office building before the company’s lease expires in 2029 reported.

Solstice said it relocated from 257 Park Avenue South in the Flatiron District and signed a 10-year-lease at 55 Broad in 2019 because it wanted to be on the 26^th floor of a “first class” office building.

The lawsuit accuses the building owners of circumventing the lease by starting the conversion project without invoking the demolition clause, which would require it to terminate office leases.

Silverstein said through a spokesperson that the owners are working with tenants “to ensure a smooth move,” offering them office space in other properties the landlord owns.

Solstice made it clear they’re not going anywhere. Asking the court to stop the project, the company said the conversion will “severely disrupt” its right to occupy its office and that asbestos removal during the conversion will be life-threatening for its workers.

When Silverstein and Metro Loft unveiled their plans in June for the apartment conversion, the Wall Street Journal reported that a third of the office space in the 56-year-old, 425K SF building was vacant. Tenants in the Lower Manhattan building were primarily financial services and tech firms.