Safehold Inks $180M Manhattan Ground Lease Agreement

The Third Avenue property located close to Grand Central Station has undergone capital improvements since 2004.
685 Third Ave. Image courtesy of Safehold Inc.

Safehold Inc. has signed a definitive agreement with an institutional investment manager to originate a new $180 million ground lease under 685 Third Ave., a 639,000-square-foot office building in Midtown Manhattan. The transaction is expected to close later this year. The investment manager is reportedly BentallGreenOak, which is in discussions to acquire the property from Unizo Holdings for $450 million, according to Connect New York.

The agreement comes on the heels of a series of ground lease acquisitions Safehold has been carrying out recently. In September, the subsidiary REIT of iStar finalized the $340 million ground lease purchase of 425 Park Ave. in a partnership with an unnamed sovereign wealth fund. In a separate deal, the company paid $195 million for the ground lease of Alohilani Resort in Hawaii.

Located in Manhattan’s Grand Central submarket, 685 Third Ave. was completed in 1960 and has undergone capital improvements since 2004. Unizo Holdings acquired the 31-story asset from Nuveen Real Estate in 2017 for $467.5 million.

BentallGreenOak is a new firm created this summer following the merger between Bentall Kennedy and GreenOak Real Estate. The newly formed company recently closed a $126 million acquisition in Miami in joint venture with Bridge Development Partners. The partnership bought an industrial portfolio and 1 million square feet of development rights within a mixed-use business park.