Dec. 26 (Bloomberg) -- Goldman Sachs Group Inc.'s Whitehall Fund and a partner completed the $1.15 billion acquisition of 230 Park Ave. in Manhattan, nine months after agreeing to the sale.

Goldman and Manhattan-based Monday Properties announced on March 28 that they had reached a deal to buy the Helmsley Building, adjacent to New York's Grand Central Station, from Istithmar World Real Estate, a property fund owned by Dubai's government. Istithmar said in an e-mail today that the deal had closed.

The purchase was the latest in a series of $1 billion-plus sales of New York office buildings, with the best space now selling for more than $1,000 a square foot. Investors paid record high prices for Manhattan offices this year and the volume of transactions reached a record $42.5 billion through the end of September, broker Cushman & Wakefield Inc. reported.

``Whitehall, in my mind, is one of the smarter private equity funds in the real estate market,'' said Phil Rosen, a real estate attorney with Weil, Gotshal & Manges LLP in New York. ``They will make a New York acquisition only if it is strategically a good buy.''

Most investment property sales of $1 billion or more have historically closed within 30 to 60 days of the deal being struck, and sometimes faster in 2006 and early 2007, said Rosen.

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``The private equity players have slowed down their acquisition pace,'' as investors have lost their appetite for bonds based on commercial mortgages, limiting financing options, he said.

Goldman Sachs spokeswoman Gia Morón said the company declined to comment on the deal.

Private equity buyers accounted for 64 percent of New York City's office building transactions in the year through November 30, according to Cushman. Real estate fund managers raised $59 billion through the beginning of October, putting them on track to beat last year's record of $72 billion, according to Private Equity Intelligence Ltd., a U.K.-based research firm.

While Istithmar intended to hold the building for longer, ``market conditions created an unusual opportunity'' for the sale, Sultan Ahmed Bin Sulayem, chairman of Dubai World, Istithmar's parent, said in the statement announcing the transaction. Istithmar bought the Helmsley tower in November 2005 for $705 million.

Alan Rogers, chief executive officer of Istithmar World Real Estate, told CNBC in an interview that he expects to make more U.S. acquisitions in 2008.

``By the end of the second quarter next year we will have an idea where this market is going,'' Rogers said. ``I actually think there will be some interesting buying opportunities.''

Helmsley

The 1929 Helmsley tower, a gilded brick and limestone structure that straddles Park Avenue, was built as the headquarters for the New York Central Railroad and named the Helmsley Building by former owners Harry and Leona Helmsley. Leona Helmsley, dubbed ``the Queen of Mean'' by New York's tabloid press for her treatment of staff, sold the building in 1998 for $250 million. She died four months ago leaving a $4 billion estate, including $12 million willed to her Maltese dog, Trouble.

Dubai is attempting to reduce reliance on the Gulf region's oil wealth and diversify its economy by investing in businesses from clothing retailer Barneys New York to the Port of Dakar in Senegal. Last month, Istithmar sold 280 Park Avenue for $1.35 billion.

Istithmar

Since its founding in 2003, Istithmar has bought New York properties including 450 Lexington Ave. and the Knickerbocker Hotel at 6 Times Square. In November 2007, it bought London's Adelphi building for $567 million as part of a plan to capitalize on surging demand for hotel rooms and office space in major Western cities.

Dubai World's businesses include port operator DP World Ltd. In August, it agreed to pay $5 billion for a 9.5 percent stake in MGM Mirage and half of the casino company's CityCentre project.

Istithmar World Real Estate, a unit of Dubai World-owned Istithmar PJSC, plans to merge with Nakheel PJSC, another property company owned by its parent that is developing three palm tree- shaped islands and an island cluster in the shape of a world map off Dubai's coast.

To contact the reporters on this story: Sharon L. Lynch in New York at sllynch@bloomberg.net; Arif Sharif in Dubai at asharif2@bloomberg.net

Last Updated: December 26, 2007 17:06 EST