Feb. 25 (Bloomberg) -- Oxford Properties Group, part of a Canadian pension fund, agreed to purchase 450 Park Ave., a 33-story building in Manhattan’s Plaza District, an area with some of the highest office rents in New York.
Oxford Properties, a Toronto-based arm of the Ontario Municipal Employees Retirement System, is under contract to buy the 330,000-square-foot (30,700-square-meter) tower at East 57th Street from Somerset Partners LLC and British investor Michael Tabor, said Doug Harmon, senior managing director at Eastdil Secured LLC, the brokerage that represented the sellers.
The buyer agreed to pay $575 million for 450 Park, or more than $1,700 a square foot, according to the New York Times, which reported the agreement earlier today. That would exceed the $1,583 a square foot the buyers paid for the building in October 2007, around the time real estate values peaked before the credit crisis, when prices fell more than 40 percent. Harmon, who brokered the transaction with colleague Adam Spies, wouldn’t disclose the terms of the deal.
The 2007 sale set a record for an office building on a per-square-foot basis, according to data from Real Capital Analytics Inc., a research firm that tracks commercial real estate sales. It was broken last year when 650 Madison Ave. was sold for $2,235 a square foot, in a deal in which most of the value was in the building’s retail portion.
Harmon also arranged the 2007 deal for the building, as well as the 650 Madison sale.
“We felt comfortable investing a large amount of cash in this quality location and asset,” Keith Rubenstein, a Somerset founder, said in an e-mail today. “The thinking back then was this location was bulletproof, would withstand any downturn in the market and value would recover faster. Looking back, I guess we were right.”
Rubenstein didn’t comment on the building’s sale price. A telephone call to Claire McIntyre, an Oxford spokeswoman, wasn’t immediately returned.
Oxford, which has made $8.7 billion of acquisitions in North America and Europe since 2001, has interests in seven Manhattan properties, according to Real Capital. It is a partner with Stephen Ross’s Related Cos. in the $20 billion multi-use project at the Hudson Yards rail depot on Manhattan’s far west side, which Related has called the largest private development in U.S. history.
Rents for top-tier office space in the Plaza District averaged almost $80 a square foot in the fourth quarter, compared with $61 a square foot for all of Manhattan, according to Newmark Grubb Knight Frank.
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