A Midtown South boutique office building has been purchased by Williams Equities for little more than half of its most recent sale price, Realty Check has learned — but there might be more to understanding the deal than the price tag indicates.
Williams paid only $147.5 million for 470 Park Avenue South, an historic, 300,000 square-foot property that takes up the entire west blockfront between East 31st and 32nd streets. The sellers were Steven J. Pozycki’s SJP Properties and PGIM Real Estate, a Prudential Financial affiliate — which bought it for $245 million in 2018.
However, the low purchase price paid by Williams doesn’t necessarily reflect the recent market phenomenon of bargain-basement deals as notoriously epitomized in the $8.5 million sale of 135 W. 50th St., which previously fetched $332 million.
Asked to address the seemingly low price for 470 Park Avenue South, Michael Cohen, a Williams principal, said, “We’re now in a post-pandemic interest rate and cap rate environment, very different from what existed in 2019 and for 10 or 20 years prior. The result has been sizable adjustments in values that are not in any way reflective of the values of a building.”
City Finance Dept. records show a $56 million mortgage on 470 Park Avenue South
from MetLife Real Estate Lending. Cohen told us, “We financed the acquisition with a new mortgage loan” to take out the old one, but he couldn’t share terms or other details pending the lenders’ approval.
Cohen added, “Our predecessors did a great job stewarding the building.”
SJP and PGIM made significant investments in a new roof terrace, ground-floor lounge and a landscaped courtyard. The upgrades helped attract such recently-signed tenants as British sports streaming service DAZN and financial platform Anchorage Digital.
Cohen said about 45% of the office space will soon be on the market for between the low $70s per square foot to the low $80s, with at least one block of over 50,000 square feet available.
The 1912-built property consists of two, interconnected structures of 12 and 18 stories. Once known as the Silk Building for its tenant roster of silk importers, it was an unusual investment for SJP, which is mainly known as the developer of major projects such as 11 Times Square and 200 Amsterdam Avenue.
But 470 Park Avenue South fits comfortably in what Cohen called Williams Equities’ “sweet spot” of architecturally distinguished, older buildings. Williams brought new life to several other properties in its Midtown South portfolio such as 136 Madison Ave., where it recently completed 57,000 square feet of leasing, and 28 and 40 W. 23rd St.
Williams plans a major capital improvements program at the West 23rd Street sites, including an updated atrium and skylights and a building-wide roof deck atop No. 28.
Credit: Source link
