Blackstone has finalized its acquisition of a 46% equity stake in Fisher Brothers’ prominent office tower located at 1345 Sixth Ave, with a total deal valuation of $1.4 billion for the 50-story, 2 million square foot skyscraper.
David Levine, co-head of Americas acquisitions for Blackstone Real Estate, expressed enthusiasm about the investment, stating, “Midtown Manhattan is the best performing office market in the country. We are excited to partner with Fisher Brothers in this trophy asset investment.”
To support this investment, the new partners have successfully refinanced the building’s debt through an $850 million CMBS loan from a consortium of Morgan Stanley, Citigroup, and JPMorgan, which is due in two years. The recapitalization allowed Blackstone and Fisher Brothers to buy out J.P. Morgan Asset Management clients’ stake in the tower.
Currently, the property boasts a robust occupancy rate of 92% and has signed over 1 million square feet of leases since the beginning of 2023, two years after completing a significant capital improvement project valued at $120 million. Notably, law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP secured a substantial 765,000 square foot lease in 2023.
In terms of advisory roles during this transaction, Eastdil Secured represented the new joint venture in the refinancing process, while Dechert LLP acted as legal counsel for the lenders. Fisher Brothers engaged Paul Hastings LLP for representation during both the acquisition and refinancing transactions, while Blackstone retained Fried Frank for its legal support.
The financing landscape remains active in New York City, with several notable transactions emerging. Rialto Capital Management provided a $31.1 million refinancing package for a multifamily portfolio owned by Gaia Real Estate Holdings, encompassing four buildings with a total of 84 apartments and seven retail spaces located across Lower East Side.
Additionally, Jamestown secured an $80 million refinancing deal for two properties in Tribeca. The financing from Landesbank Baden-Wurttemberg replaces a prior $145 million loan from Capital One and pertain to a 358-unit residential building at 343 Broadway and a nearby retail building at 339 Broadway.
In Midtown, a shell company owning the Embassy Suites hotel closed a $131 million refinancing deal for the property located at 60 W. 37th St., with funds provided by Wells Fargo.
Civic Builders has also made headlines with a $70 million construction loan designated for developing a new charter school in the South Bronx. This credit involves multiple stakeholders, including Build NYC, NYC Regional Center, JPMorgan Chase, Capital Impact Partners, LISC, and Nonprofit Finance Fund, with the project site located at 1472 Boston Road, where Civic Builders plans to demolish an existing 17,000 square foot commercial structure to make way for a five-story, approximately 60,000 square foot school building. The new charter school will serve K-8 grades and will have a capacity of up to 700 students with a lease agreement with Bold Charter School, which will also hold an option to purchase the property.
Westbeth Artists Housing is securing a focus as well, having obtained an $88.2 million mortgage to refinance the historic Manhattan artist housing complex. This funding comes from Merchants Capital and the New York State Housing Finance Agency for the 700,000 square foot residential condominium located at 463 West St.
Further financing developments include Carlyle Group’s $137.8 million refinancing of three buildings, including a property at 1203 E. New York Ave. in Brownsville occupied by Public Storage, along with an industrial building at 2926 Fredrick Douglass Blvd. and a retail condo at 31-08 Northern Blvd. This debt from PGIM Real Estate replaces a previous loan of $127.6 million from Santander Bank.
In terms of leasing activity, Global Holdings Management has achieved full occupancy at 99 Park Ave following the recent lease transactions. Southern Land Co. signed a 13,000 square foot lease at this location, relocating from 75 Rockefeller Center.
In another significant deal, Tom Ford Fashion signed a 12,000 square foot lease at SL Green’s 500 Park Ave, which is now also fully leased. This property has numerous prestigious tenants, including The Georgetown Co. and Vera Wang. David Goldstein, Jarod Stern, and Sam Mann of Savills were responsible for representing Tom Ford, while JLL’s team represented SL Green.
Wilson Daniels has also made moves, securing a 12,000 square foot lease at The Feil Organization’s 250 Park Ave. S., with plans to relocate from its existing space at 19 W. 24th St. The owners of this 12-story, 130,000 square foot office building intend to create a custom-designed wine cellar for Wilson Daniels to showcase its collection.
Cresilon, a biotech firm, has almost doubled its footprint at Industry City, increasing from 27,000 square feet to 55,000 square feet to accommodate expanded manufacturing capacities. Another biotech firm, Rumi Scientific, has signed a lease for 6,000 square feet at the same campus, relocating from New York Blood Center. Industry City’s Jeff Fein managed the representation for the landlord in both transactions.
Samsung, the electronics giant, recently expanded its footprint at Vornado’s 1 Penn by signing for an additional 36,000 square feet. This deal is part of a plan to double its office space, with both leases set to expire in a decade. JLL’s Matthew Astrachan represented Samsung while Vornado’s team provided in-house representation.
Piedmont Realty Trust, which recently updated its corporate name, has signed leases with the Center for New York City Neighborhoods and law firm Israel David LLC at 60 Broad St. The former secured 11,000 square feet while the latter signed for 3,000 square feet. This brought the occupancy of the building to 93%.
In a significant sale, a joint venture between asset management firm Investcorp and real estate company Brickman sold two Midtown office buildings at a combined loss of $116 million, selling 229 W. 36th St. and 256 W. 38th St. for a total of $40.8 million after purchasing the pair for $156.8 million in 2017. Empire Capital Holdings purchased these properties, receiving equity investment support from Cayre Equities for the 12-story 229 W. 36th St., which is currently 53.7% leased, while The Hakimian Organization partnered on the deal for the 14-story 256 W. 38th St., having a 75% occupancy rate.
In another transaction, developer Andrea Gjini acquired a parking lot beside a Dunkin’ location in the Bronx for $11.5 million, with the development site located at 205 W. 230th St. sold by previous owners Michael Ashkenazy and Joshua Agus.
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