Office Tower at 600 Third Ave. Back in Play
A BlackRock partnership is again testing investor interest in the office building at 600 Third Avenue in Midtown Manhattan.
Market pros estimate that the 575,000-square-foot property, which stretches from East 39th to East 40th Street, is worth roughly $700/sf, or $403 million.
BlackRock holds a 95% interest. L&L Holdings owns the remaining stake. Last year, the duo tapped Eastdil Secured to quietly shop a 49% interest — a size geared toward foreign investors that avoid majority stakes because they can incur onerous capital-gains taxes upon an eventual sale. The stake would have come from BlackRock’s share, as New York-based L&L wants to retain its ownership position and continue as the property operator.
Now the BlackRock team is again approaching potential buyers, although the size of the stake it is willing to sell is unknown. So far, it is working without a broker, but could still hire one.
L&L acquired its interest in 2004, when it teamed up with GE Asset Management to buy the property from Sumitomo Corp. of America for $212 million. BlackRock bought out GE’s stake in 2006 in a deal that valued the building at $315 million.
The property is nearly fully occupied. The largest tenant, L-3 Communications, renewed its lease on about 100,000 sf in late 2015 for 15 years. Other tenants include Kroll, Regus, Shinhan Bank and law firms Aaronson Rappaport and Polsinelli, according to CoStar. There is also some retail space, whose tenants include Shake Shack.
The building, on the west side of Third Avenue, was constructed in 1970 and underwent some $12 million of renovations in recent years, including upgrades to the lobby, security system, restrooms and elevators. There is an adjacent public plaza.
The offering is the second on Third Avenue to emerge this month. As previously reported, a TH Real Estate partnership is preparing to market the 646,000-sf building at 685 Third Avenue, a few blocks north. Its value is estimated at roughly $450 million, or almost $700/sf. The building is 93% occupied. CBRE has the listing.