May 22 (Bloomberg) -- Bank of New York Mellon Corp., the world’s largest custody bank, agreed to sell its headquarters tower at 1 Wall St. in lower Manhattan to a joint venture led by Harry Macklowe’s Macklowe Properties for $585 million.
The deal for the 1.1 million-square-foot (102,000-square-meter) skyscraper is expected to be completed in the third quarter, the New York-based bank said yesterday in a statement. The company has been seeking to scale back its office needs and is looking for other locations to lease space.
The sale “will advance our plan to consolidate office space in New York City, lead to a more functional and efficient work environment for our employees, and deliver a solid financial gain to the company,” BNY Mellon Chairman and Chief Executive Officer Gerald L. Hassell said in the statement.
BNY Mellon is looking for about 400,000 square feet of offices to move employees once the building is sold. The bank is in the midst of choosing between Brookfield Office Properties Inc.’s 225 Liberty St. in lower Manhattan or 70 Hudson St. in Jersey City, New Jersey, a person with knowledge of the discussions said earlier this month.
The company expects to announce its leasing decision in the next two months, Hassell said in the statement.
The price values 1 Wall St. at about $530 a square foot, among the highest ever on a per-square-foot basis for a lower Manhattan office tower, according to data from Real Capital Analytics Inc. The post-recession peak of $577 a square foot was reached in December when Verizon Communications Inc. sold part of its headquarters building at 140 West St. to Magnum Real Estate Group, which is converting the space to luxury condos.
The sale to Macklowe, co-developer of the high-rise condominium tower 432 Park Ave., raises the possibility that 1 Wall St. will be converted for residential use. The property was marketed as a condo conversion opportunity, with parts near the bottom of the building to be used for retail or offices.
Steven Solomon, a Macklowe spokesman, declined to comment on the deal.
For Macklowe, 76, the deal would be another step in a return to prominence after he lost seven Midtown skyscrapers when credit markets froze in 2008. He had financed their $7 billion purchase the year before with almost all short-term debt. The setback also forced him to sell Midtown’s General Motors Building, one of the city’s most valuable skyscrapers.
Macklowe is a partner with Los Angeles-based CIM Group on 432 Park, which the developers say will be the tallest residential tower in the Western Hemisphere. It’s one of several condominium projects under way on or near 57th Street that will offer commanding views of Central Park and capitalize on international demand for luxury housing as a haven for cash.
Macklowe and CIM also paid $253 million in 2011 for 737 Park Ave., an Upper East Side rental building, which is being converted to condominiums, according to data compiled by Real Capital, a New York-based research firm that tracks commercial real estate sales.
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