Blackstone Group LP (BX) is preparing to sell New York’s 1095 Avenue of the Americas, a 42-story office tower that may fetch one of the highest prices ever for a U.S. skyscraper, according to two people familiar with the plans.
Blackstone has hired Eastdil Secured LLC to market the 1.2 million-square-foot (111,500-square-meter) property, said one of the people, who asked not to be identified because the plans are private. The building, soon to be the headquarters of Verizon Communications Inc. (VZ), may sell for about $2.25 billion, the person said.
“If they were to hit this number, it would show the market is still extremely strong for these assets,” said Ben Thypin, director of market analysis at property-research company Real Capital Analytics Inc. “If you want to buy an office building of this size, you only have so many choices.”
Blackstone, the world’s biggest alternative investment manager, has been selling some assets from its 2007 takeover of Sam Zell’s Equity Office Properties Trust as real estate in prime U.S. coastal markets rebounds. The tower, between 41st and 42nd streets and also known as 3 Bryant Park, was purchased as part of the $39 billion acquisition. It houses insurer MetLife Inc. (MET)’s administrative offices in addition to Verizon, which will make the building its headquarters on Sept. 1.
Christine Anderson, a spokeswoman for New York-based Blackstone, declined to comment on plans to sell the building. A telephone call to Martha Wallau, an Eastdil spokeswoman, wasn’t immediately returned.
The highest-valued building in the U.S. is New York’s General Motors Building, according to New York-based Real Capital. The families of Chinese real estate developer Zhang Xin and Brazil’s Safra banking empire bought a 40 percent stake in the tower for about $1.4 billion last year, implying a $3.4 billion value for the 50-story property.
A sale of more than $2 billion would be the biggest of a single U.S. property since the GM Building sold to Boston Properties Inc. in 2008, according to Real Capital.
Blackstone has been taking advantage of strong demand for high-quality U.S. real estate from foreign wealth funds and pension plans to sell assets it has improved through leasing gains or renovations. The Bryant Park building has undergone a “successful three-year, $300 million renovation,” according to the building’s website. Itsoffice space is 99 percent leased, according to CoStar Group Inc., a Washington-based research firm that tracks office leasing.
Building KeptWhile it sold many of the buildings it bought in the Equity Office deal almost immediately, including seven midtown Manhattan towers, Blackstone kept 1095 Avenue of the Americas, which was being completely rebuilt from its steel frame out. Blackstone paid about $1.47 billion for the building as part of the takeover, according to data compiled by Real Capital.
“The office market has come a very long way” since the acquisition, Thypin said in a telephone interview. “Even if this doesn’t sell for exactly what they’re asking, it’s still going to be a very high price.”
READ MORE: http://www.bloomberg.com/news/2014-08-28/blackstone-said-to-plan-nyc-sale-for-more-than-2-billion.html
CBRE Global Investors just can’t get enough of Sunnyvale.
Five months ago, I wrote about the investment manager scooping up about a half million square feet in that city’s Moffett Park submarket, in what may or may not have been a stealthy land assemblage forGoogle Inc.
And since then? Global Investors has been very busy indeed.
By my count, the Los Angeles based firm has now acquired, or will soon close, on roughly triple that amount of space — at least 1.5 million square feet in upwards of 30 buildings. The total cost of these deals is now at least $425 million, according to a rough tally of title and tax records, as well as estimates by market observers. (My numbers may be off because I was not able to confirm every property price, and I may have missed some.)
Most of these buildings are older, low-density R&D or industrial-type product that industry observers consider ripe for redevelopment. The Moffett Park submarket contains enough office capacity for about 1.33 million additional square feet of space under Sunnyvale's current city planning guidelines.
"A lot of this is probably driven by office development as opposed to industrial investment," said Ben Thypin, director of market analysis for Real Capital Analytics, a New York-based research firm. "They see the office market is hot, so whether it's Google or CB or other investors, they're trying to gather up as much convertible space or buildable land in a particularly good office market."
Read More: http://www.bizjournals.com/sanjose/news/2014/08/25/update-cbre-global-investors-deals-in-sunnyvale.html
It’s been a common question as the apartment recovery matured: When will cap rates stop falling in the so-called “sexy six” markets of New York, Boston, Washington, Los Angeles, Northern California, and Seattle?
Well, if you guessed the first half of 2014, you were wrong.
In its “Apartment Mid-Year Review,” New York-based firm Real Capital Analytics (RCA) reported that cap rates fell to 4.4 percent in the second quarter, equaling the historic low established in the second half of 2006. For mid- and high-rise properties, yields came in at 3.9 percent after they blew past previous lows in 2013. So much for fears cap rates were getting too low in the gateway markets.
“There is so much capital pouring into those big six markets that even if many investors are concerned about valuations, there are plenty of investors still competing fiercely for those properties that the investors with concerns have passed on,” says Ben Thypin, director of market analysis at RCA.
Read More: http://www.multifamilyexecutive.com/dispositions-and-transactions/cap-rates-fall-to-historic-lows-as-investors-chase-yield-far-afield_o.aspx?dfpzone=home
Ben Carlos Thypin
I am currently the co-founder of Quantierra, the world's first data driven real estate brokerage and investment manager. In my former life as Director of Market Analysis at Real Capital Analytics, I worked with press outlets large and small to provide them with great data and insightful commentary. Here are some of the results of this collaboration. For the rest, please check out the News Archive.