MHP Buys Half-Billon-Dollar Office Building in NYC
- Apr 11, 2016
New York—Perhaps it’s going to be an annual ritual. One year after announcing the acquisition of a major New York City office property, MHP Real Estate Services has snapped up another. The company recently partnered with Chinese conglomerate HNA Property Holdings on the purchase of 850 Third Ave., a premier office tower in Midtown Manhattan. MHP and HNA shelled out $463 million for the 617,000-square-foot asset, taking it off the hands of Shorenstein Properties in an off-market transaction.
A 21-story building with ground level retail, 850 Third first opened its doors in 1962. Today, the Emery Roth & Sons-designed tower is home to the likes of the city of New York, Radio One and Discovery Communications, which anchors the building with a 165,000-square-foot space.
It’s not a bad time to own office property in Midtown, but according to MHP, it’s a really good time to own in Midtown East.
“The Midtown East office market is experiencing an extraordinary renaissance that will further redefine the city, and reshape a time-tested enclave of New York business,” Norman Sturner, CEO of MHP Real Estate Services, said in a prepared statement. “The East Side Rezoning efforts, along with the area’s existing transportation infrastructure and addition of the Second Avenue subway line, have created new opportunities for growth, and we’re excited to be part of this movement.” The vacancy rate in Midtown East is just 5.7 percent, according to a first quarter 2016 report by Cushman & Wakefield.
Morgan Stanley provided MHP and HNA with financing for the acquisition of 850 Third, including a $210 million gap mortgage, per New York City records. Lenders like the property; in 2014, MetLife Inc. provided then-owner Shorenstein with $170 million in financing to replace a $180 million loan that had been obtained from Deutsche Bank in 2010.
MHP will serve as operating partner of 850 Third’s joint venture ownership, and HNA will hold the position of majority partner.
MHP is no stranger to big Manhattan office deals. In January 2015, the real estate investment and management company revealed it had joined forces with Clarion Partners to acquire 180 Maiden, a 1.2 million-square-foot office tower in the Financial District, for approximately $470 million.