Paramount Group has bought a forty five % stake in 900 Third Ave., a 36-story, 600,000-square-foot Class A workplace constructing in Midtown Manhattan, in a deal that valued the trophy tower at $210 million.
The customer was not recognized. Paramount will retain the 55 % controlling curiosity and proceed to handle and lease the property situated between East 54th and East fifty fifth streets within the Plaza District submarket.
The deal strengthens the New York Metropolis-based workplace REIT’s steadiness sheet and offers the agency flexibility in its capital allocation technique.
Paramount, which owns, operates, manages and redevelops high-quality Class A workplace properties in choose New York Metropolis and San Francisco submarkets, acquired the tower from The Carlyle Group in November 1999 for $163.2 million, or about $274 per sq. foot, in keeping with CommercialEdge knowledge. The most recent transaction values the property at about $350 per sq. foot.
Constructing highlights
The LEED Gold-certified constructing was designed by Cesar Pelli, Viñoly Design Architects and Emery Roth and Sons and accomplished in 1983. The tower has 44,000-square-foot floorplates, distinctive gentle and views, in addition to a superior location that gives entry to eight subway strains and Grand Central Terminal.
The multi-tenant constructing has an 83 % occupancy price and 237,680 sq. ft of workplace area obtainable, in keeping with CommercialEdge. The property additionally has 14,805 sq. ft of retail area on the primary ground and the underground degree.
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Present tenants embody Littler legislation agency, White Oak Healthcare Finance, FirstKey Mortgage, Zweig-DiMenna Associates, Carl Marks Administration Co., Financial institution of America, Virtu Monetary, Financial institution Negara Malaysia, Amber Capital Funding Administration and RE Loewenberg Capital Administration, in keeping with CommercialEdge knowledge.
Manhattan workplace market strikes
Paramount had deliberate to promote the constructing a number of years in the past however a cope with Aby Rosen’s RFR Realty to purchase the tower for about $400 million fell aside in early 2020 because the COVID-19 pandemic hit America, shutting down all workplaces throughout the nation. Since then, Manhattan, like many U.S. workplace markets, has struggled to regain its footing and property values for a lot of workplace buildings have declined.
However there are indicators of enchancment within the Manhattan workplace market and Paramount believes the sale of the non-controlling curiosity in 900 Third Ave. underscores the underappreciated worth of the asset.
Tenants proceed to flock to high-quality, newly constructed or not too long ago redeveloped towers. In November, SL Inexperienced Realty Corp. closed on the sale of an 11 % curiosity in One Vanderbilt, the 1.7 million-square-foot skyscraper in Midtown Manhattan, to Mori Constructing Co. Ltd. The deal valued the tower at $4.7 billion. SL Inexperienced maintained a 60 % stake within the skyscraper that’s now totally leased. The property’s different house owners embody the Nationwide Pension Service of Korea and Hines.
Cushman & Wakefield reported workplace leasing ended 2024 on a powerful be aware with fourth-quarter new leasing totaling 6.7 million sq. ft—the very best quarterly whole because the third quarter of 2022 and 6.3 % larger than the 10-year quarterly common. The fourth-quarter Manhattan workplace report additionally acknowledged there have been 23 new and growth leases larger than 100,000 sq. ft, up from 16 in 2023.
Within the largest lease of the fourth quarter, Bloomberg LP inked a renewal and growth lease at SL Inexperienced’s 919 Third Ave., a 1.5 million-square-foot, 47-story workplace tower. The deal brings the worldwide writer’s footprint to 924,876 sq. ft on the Midtown Manhattan high-rise. Bloomberg agreed to a 749,035-square-foot, 11-year lease extension beginning March 1, 2029, and a brand new 175,841-square-foot 15-year growth.
