Office Space at NYC High-Rise Commands $135M
- Aug 07, 2018
The approximately 100,000-square-foot commercial office segment at 685 Fifth Ave. in Manhattan has come under new ownership. A joint venture steered by Deutsche Finance America and BLG Capital—subsidiaries of Munich-based Deutsche Finance Group and Istanbul-based Bilgili Group, respectively—acquired the vacant office section from GGP for $135 million, according to an SEC filing.
Once known as the Gucci Building for one of its previous owner/tenants, 685 Fifth not only features office space, it boasts a prominent multi-level retail segment encompassing roughly 25,000 square feet. The property last changed hands in 2014, when GGP and Thor Equities acquired the asset in its entirety for $460 million. Under the new ownership, 685 Fifth will go through some changes.
“685 Fifth Avenue is an iconic piece of real estate in an irreplaceable location and I am very excited about its potential for redevelopment,” Sven Neubauer, chief investment officer with Deutsche Finance Group, said in a prepared statement. The redevelopment will include the addition of five floors and the transformation of the space into luxury apartments, according to Deutsche Finance Group’s press release. Deutsche Finance and joint venture partner BLG Capital raised $155 million of equity for the purchase of the office asset, as well as its redevelopment. The partners will also pursue roughly $100 million of debt financing for the project.
Cross-border investors ramped up their U.S. acquisitions into 2018, according to an insights report by Real Capital Analytics. “Perennial investor favorite Manhattan was the top target of cross-border buyers in the 12 months through Q1’18, garnering more than $8 billion in cross-border deal volume,” Jim Costello, a senior vice president with Real Capital Analytics, wrote.
Recent Manhattan transactions have run the gamut in size and include, on the lower end, the $64 million acquisition of a 13,800-square-foot, five-parcel offering in Kips Bay by Minrav USA, the U.S. division of Israel-based Minrav Development. In a $700 million deal, Toronto’s Oxford Properties Group and Canada Pension Plan Investment Board purchased a portion of the historic St. John’s Terminal site.
Image courtesy of Yardi Matrix