Manhattan’s 530 Fifth Ave. Building Sold for $595 MillionDavid M. Levitt and Nadja Brandt
An office tower on Manhattan’s Fifth Avenue is under contract to be sold for $595 million to an investor group including Thor Equities LLC and mall owner General Growth Properties Inc.
The deal for the 500,000-square-foot (46,000-square-meter) building at 530 Fifth Ave. is expected to close in mid-September, sellers Rockwood Capital, Jamestown, Murray Hill Properties and Crown Acquisitions said in a statement yesterday. Thor, based in New York, is joining with Chicago-based General Growth and Scott Rechler’s RXR Realty LLC in the purchase, said three people with knowledge of the terms, who asked not to be identified because the deal isn’t complete.
Thor, a closely held real estate company headed by Joseph Sitt, negotiated the sale off-market, then brought in RXR and General Growth, the second-biggest U.S. shopping-mall owner, as partners, one of the people said. The investors plan to separate the office and retail portions of the building, with Uniondale, New York-based RXR owning the offices and Thor and General Growth controlling the retail, according to the person.
The current owners bought the building, two blocks west of Grand Central Terminal between 44th and 45th streets, in January 2012 for $390 million, according to New York-based research firm Real Capital Analytics Inc. The group spent more than $10 million on renovations to the property, according to today’s statement.
“Fifth Avenue will always serve as an iconic location in NYC for retail and office space,” Michael Phillips, chief operating officer of Atlanta-based Jamestown, said in the statement. “Once we repositioned the 530 Fifth Ave. property with a renovated lobby, internal upgrades and amenities,” the investors saw an opportunity to profit from a sale.
Eastdil Secured LLC represented the sellers, according to the statement.
The building is about 68 percent occupied, according to CoStar Group Inc., a Washington-based research firm that tracks commercial-property leasing. Office tenants include Massachusetts Mutual Life Insurance Corp. and Diageo North America Inc., an alcoholic-beverage merchant, according to the statement. A JPMorgan Chase & Co. branch and fashion merchants Desigual and Fossil are among the retail tenants.
About 40,000 square feet of retail space and about 100,000 square feet of offices are available to be leased, providing the buyers with an opportunity to increase revenue, the people with knowledge of the agreement said.
Average retail rents along Fifth Avenue from 42nd Street to Rockefeller Center, cheaper than the upscale corridor to the north, have about doubled to more than $1,000 a square foot in three years, according to reports by the Real Estate Board of New York, a trade organization representing the city’s landlords. The market has attracted such fashion retailers as H&M, Urban Outfitters and Tommy Bahama.
David Keating, a General Growth spokesman; Ed Tagliaferri, a spokesman for RXR; and Stefan Friedman, a spokesman for Thor, declined to comment on the partnership terms. General Growth is the biggest U.S. mall owner after Simon Property Group Inc.