Unizo Picks Buyers for 2 Midtown NY Offices
Unizo Holdings has struck preliminary agreements to sell two Midtown Manhattan office buildings for at least $440 million in total.
A partnership between TIAA unit TH Real Estate and Taconic Investment of New York has emerged as the winning bidder for the roughly 400,000-square-foot building at 440 Ninth Avenue. It’s unclear if the duo has signed a formal contract yet, but the price being discussed was north of the expected, or “whisper,” price of $250 million, or $625/sf, according to sources. CBRE is advising Unizo, a Japanese investment manager.
Separately, Broad Street Development has won the bidding for the 312,000-sf office building at 370 Lexington Avenue. The tentative agreement values the building at about $190 million, or $610/sf. Cushman & Wakefield is running that sales process.
Meanwhile, Unizo continues to market the 255,000-sf office building at 321 West 44th Street. Cushman also has that listing.
Unizo, formerly known as Jowa Holdings, bought the 18-story building at 440 Ninth Avenue in 2013 for $211.5 million, or $520/sf, from a joint venture between Paramount Group and Sherwood Equities, both of New York. CBRE brokered the sale, which was Unizo’s first purchase in the U.S.
The property is at the southeast corner of West 35th Street, a few blocks from Penn Station. It was constructed in 1927. SL Green Realty bought it and two other buildings in 1998 from another New York firm, MHP Real Estate Services. That deal pegged the value of 440 Ninth Avenue at $32 million. SL Green renovated it and sold it to the Paramount team in 2008 for $160 million.
Broad Street’s purchase price for 370 Lexington Avenue is well below the $247 million that Unizo paid in 2015 when it acquired the 27-story building from a joint venture between J.P. Morgan Asset Management and Sherwood.
This will be Broad Street’s second go-round with the property. The New York shop, led by investor Raymond Chalme, teamed up with Crow Holdings of Dallas to buy it in 2006 for $97.2 million. The duo sold it to the J.P. Morgan team two years later for $155 million.
The property, which was built in 1929, is at the northwest corner of East 41st Street, two blocks south of Grand Central Terminal. It’s roughly 80% occupied, mostly in small blocks. There is some 12,000 sf of retail space. Broad Street will likely seek to lease vacant space and raise rents as leases roll over. It will presumably also make upgrades.
The West 44th Street building still on the market has drawn multiple bidders. Its value is estimated at roughly $175 million, or $686/sf. Unizo’s minority partner, local investment firm East End Capital, has a right of first offer, which positions it as a potential buyer. That shop is led by Jonathon Yormak and David Peretz.
Unizo bought its majority stake in the Hell’s Kitchen property in 2015 for $165 million, or $647/sf, from East End, which retained a small ownership stake and continues to manage the building. The duo fully renovated the property, including the addition of a rooftop garden, to appeal to “creative” office tenants. The occupancy rate is 85%. There is a New York Beer Company bar/restaurant at street level.
The property was renamed The Plant in homage to a former tenant, The Record Plant, a music studio where John Lennon recorded the song “Imagine” and Bruce Springsteen recorded “Born to Run.”