This Week's N.Y. Deal Sheet
Coronavirus' tightening grip on the city has dominated the headlines over the last week but amid the turmoil and economic uncertainty, deal-making has gone on. Amazon made a massive purchase in Manhattan, for example, streaming service Netflix locked down a short-term lease and one REIT scored major financing.
Top Sales
Amazon picked up the former Lord & Taylor building, relieving WeWork of what was becoming a problem for the ailing coworking company. The buyer paid $978M, per records filed with the city last week. However, the deal works out to be a total of $1.15B and involves Amazon paying $750M in construction loans that WeWork took out for the revamp of the property. The rest of the purchase price comes via $350M in equity, according to The New York Post. Former WeWork CEO Adam Neumann won’t make any money on the sale, and WeWork will be allowed to get out of the lease it has there in exchange for waiving economic interest, per the report.
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Dallas-based Gaedeke Group bought 44 Wall St. in Lower Manhattan, paying $200M to Blackstone. George Comfort & Sons will operate the 350K SF office tower, per a release from Finback Real Estate. Finback’s Michael O’Callaghan and Gentry Ashmore Hoit represented the buyers. Eastdil Secured’s Will Silverman and Hodges Ward Elliott’s Paul Gillen brokered the deal on behalf of the seller.
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TF Cornerstone and RXR Realty dropped $31.5M on an interest in air rights over Grand Central Terminal, PincusCo reports. The seller was MSD Capital, an investment firm that manages Michael Dell’s family office. The three parties announced in February 2019 that they are joining together with a plan to pull down the Grand Hyatt New York next to Grand Central Terminal and build a 2M SF mixed-use tower in its place. This transaction is for 28.8% of the air rights parcel attached to 89 East 42nd St., per the website, suggesting the entire air rights parcel is valued at $109M.
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HFZ Capital is reportedly expanding its Upper East Side assemblage, picking up new assets there from two sellers. The company paid Montrose Lexington Associates $30.5M for 150-152 East 79th St., The Real Deal reports. The sale covers two mixed-use properties. In a separate deal, the Ziel Feldman-led company paid Marcos Camhis $18.7M for 154 East 79th St., per PincusCo. The sale also includes a mixed-use property.
Top Leases
Netflix leased nearly 17K SF at 1155 Sixth Ave. in a short-term, seven-month deal, The Real Deal reports. The lease is under Durst Organization’s “Durst Ready,” which is the landlord's new flexible workspace provider. Asking rent in the deal, one of the first signed with the new venture, was $115 per SF.
Other recent Durst Ready deals include equity management startup Carta’s lease for 13K SF at One World Trade Center for five months, while Christian Brothers Investment Services is taking nearly 3K SF at 733 Third Ave. for seven years, per TRD. Netflix didn't have broker representation, though Cushman & Wakefield’s Andrew Ross, Barry Garfinkle and Gary Greenspan arranged the lease for CBIS. JLL’s Justin Haber, Kyle Riker and Steven Rotter represented Carta in its negotiations. Durst’s Ashley Mays represented the landlord in-house on the deals for CBIS and Netflix. Eric Engelhardt and Karen Kuznick arranged the Carta lease on behalf of the landlord.
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AbleTo, a virtual behavioral healthcare company, is expanding and renewing at 320 West 37th St., according to Newmark Knight Frank. The building is owned by Sioni Group. The company, which now has 19K SF across two floors, is moving its headquarters to the space from within the building. It was offered $2M in Excelsior Jobs Program tax credits in 2017 to expand there and create 94 new jobs. NKF’s Fred Smith, Thomas Burrus and Elizabeth Ughetta arranged the deal.
Top Financing
Safehold locked down $134.8M from John Hancock Life Insurance Co. for the ground underneath 685 Third Ave., The Real Deal reports. Safehold, which is a ground-lease REIT managed by iStar, purchased the property late last year from Unizo Holdings. It originated the ground lease, setting up a $180M fee interest holding for itself, and sold the leasehold on the building to BentallGreenOak for $271.3M, per TRD.
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New Empire Real Estate Development, led by Bentley Zhao, scored $41.5M for 208 Delancey St. on the Lower East Side, PincusCo reports. Axos Bank is the lender on the new construction loan. Zhao reportedly picked up the site in 2017 for $29M, and the developer is planning to build 69 condominium units, according to New York Yimby.
