This Week’s N.Y. Deal Sheet: Shuttered Marriott Sells For Huge Discount
More evidence of how far some New York City property values have fallen emerged this week, with a shuttered Marriott hotel in Midtown East selling at nearly half the price its previous owner paid.
TOP SALES
German investment firm Deka Immobilien has relinquished the former New York Marriott East Side hotel at 525 Lexington Ave. for $153.4M, The Real Deal reported. The buyers, a joint venture of Hawkins Way Capital and Värde Partners, got acquisition financing from Madison Realty Capital for the purchase of the 655-key hotel, which closed its doors permanently in 2020. The hotel had been a source of conflict for Deka, a subsidiary of DekaBank, which paid approximately $270M for the property in 2015 but fought court battles with Marriott International and former joint venture partner Ashkenazy Acquisition Corp. The property's new ownership purchased another former Midtown hotel, the DoubleTree at 569 Lexington Ave., in 2010. TRD reported that the pair’s plans for the former Marriott could include student housing. Bob Knakal and Jeff Davis of JLL brokered the deal on behalf of Deka.
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Private investment firm Reda Holdings has purchased a Williamsburg multifamily building from Kushner Cos. for $34.9M, Commercial Observer reports. The price isn't much higher than the $33.8M Kushner paid to acquire the 55K SF, 46-unit property 10 years ago. Reda doesn’t have plans to make major changes to 50 North First St., which is made up of one-, two- and three-bedroom units that are rent-stabilized until 2038 under the now-expired 421-a tax abatement. Amalgamated Bank provided a $23M acquisition loan to Reda for the purchase. Daniel Lebor and Matt Cosentino of TerraCRG repped Kushner in the deal, along with Aaron Jungreis, Ben Khakshoor and Alex Fuchs of Rosewood Realty.
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A seven-floor mixed-use Lower East Side property has changed hands for $23.8M, Crain’s New York Business reported. The 20-unit elevator building at 324 Grand St. with just under 2K SF of retail at its base is fully leased, according to StreetEasy and Ripco Real Estate. Derrick Fok, a real estate salesperson, signed for the buyer, according to public records, while Empire Capital Holdings was the seller.
TOP LEASES
Law firm Polsinelli is growing its footprint at L&L Holding Co.’s 600 Third Ave. office tower. Polsinelli signed a 10-year extension keeping it at the 42-story Midtown East building through 2036, expanding by 13K SF to occupy a total of 52K SF and making it the property’s largest tenant. Other tenants in the 53-year-old, 575K SF tower include legal practice Aaronson Rappaport, the Permanent Mission of Austria to the United Nations and global investment management firm 3G Capital. L&L acquired the property in 2004 and has since redesigned and renovated the building plaza and its public space. The building is now 94% leased, according to the release. CBRE’s Kevin McLennan, Ian Murphy and Silvio Petriello repped Polsinelli in the deal, while L&L had in-house representation from David Berkey.
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Stone wholesale store Ann Sacks has signed a 20K SF lease at 21-01 51st Ave., also known as the Cardinal Building, according to a release. The Kaufman Organization and True North-owned property in Long Island City will be used as a showroom and working studio for the business, which will occupy the ground floor. Cresa’s Tyler Clutts repped the tenant, and JLL’s James Ferrigno repped the ownership group.
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The Olayan Group has signed a new tenant to its 41-story Midtown office building at 550 Madison Ave., according to a release. Investment advisory firm Junto Capital Management has signed a long-term lease for 25K SF on the 33rd floor of the 800K SF tower long known as the Sony Building for its former anchor tenant. Olayan bought the building as it was being vacated and, after extensive renovations, signed insurance giant Chubb to 240K SF across 10 floors and luxury brand Hermès to 72K SF across three floors. The lease is an expansion for Junto Capital Management, which is relocating from 450 Park Ave. to 550 Madison, which also counts RXR as a minority owner.
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The United Federation of Teachers has signed a 20-year lease for 45K SF in the Bronx’s Co-op City, according to a release. UFT, which reps almost 200,000 active and retired teachers and other professionals, will relocate from 2500 Halsey Ave. to part of the fourth floor of the Co-op City building when it opens this fall. The property, which was originally built in 1988 before being redeveloped in 2002 by landlord Prestige Properties, is part of the Bronx’s nearly 2M SF mixed-use Bay Plaza development. The landlord was represented by JLL’s Al Gutierrez and Ian Ceppos, and UFT was represented by Cushman & Wakefield’s Mark Boisi and Stephen Bellwood as well as Lipinski Real Estate’s Neil Lipinski.
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Nonprofit Building Service 32BJ Health Fund has signed a 19K SF lease at the Kaufman Organization’s 22 West 19th St. office building in Flatiron, Commercial Observer reports. The lease gives the 32BJ fund the entire second floor of the 11-story building, which is known as the Cluett Building and was constructed in 1901. The property is almost fully leased despite being classified as a Class-C building by LoopNet. Jenna Catalon and Mark Weiss of Cushman & Wakefield repped the tenant, and Kaufman’s Michael Heaner and Sam Stein repped the landlord in-house.
TOP FINANCING DEALS
A joint venture of Be-Aviv and Slate Property Group has scored a $36.4M debt package to refinance its construction loan on a Williamsburg multifamily property, Commercial Observer reported. The loan for the 116-unit property at 222 Johnson Ave. comes from Valley National Bank, which also provided the construction loan. The seven-story property, which has 35 income-restricted apartment units and amenities including a business center, a fitness center and a rooftop area, is fully leased.
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Northwind Group provided a $313M construction loan for Fortress Investment Group, Bizzi & Partners and EB-5 lender U.S. Immigration Fund’s 88-story 125 Greenwich skyscraper, a residential tower featuring 273 apartment units, Bisnow reported last week. The property, which has faced obstacles like construction delays and scandals engulfing former partners on the project, began construction in 2017 and has topped out but hasn't yet been completed. A Walker & Dunlop team that included Aaron Appel, Keith Kurland, Jonathan Schwartz, Adam Schwartz and Michael Diaz arranged the financing, with law firms Skadden; Hogan Lovells; Kramer Levin; Rosenberg & Estis PC; and Polsinelli also involved in hammering out the deal.
