The Blackstone Group has agreed to purchase New York’s Park Avenue Tower for $750 million from Shorenstein Properties, PERE has learned.
According to sources familiar with the situation, the New York-based real estate and private equity giant will acquire the property on behalf of its latest global real estate fund, Blackstone Real Estate Partners VII, which closed on $13.3 billion in 2012.
Blackstone originally acquired Park Avenue Tower as part of its $39 billion purchase of Equity Office Properties Trust from Sam Zell in 2007. However, prior to the closing of the Equity Office portfolio, Blackstone sold the 619,631 square-foot building and six others to developer Macklowe Properties for approximately $7 billion.
The current sale price is a “definite discount” to the property’s value when Blackstone sold it in the portfolio to Macklowe, a source noted.
After Macklowe defaulted on the building’s loans in 2008, San Francisco-based Shorenstein purchased the tower from Deutsche Bank on behalf of Shorenstein Real Estate Partners Fund IX for $665 million, according to data provider Real Capital Analytics.
Blackstone has also purchased Park Avenue Tower at an opportune time in the property’s leasing cycle. The building’s anchor tenant, law firm Paul Hastings, currently occupies 253,000 square feet, but will be vacating when its lease ends in 2016. Hedge fund Davidson Kempner Capital Management also plans to vacate its 50,000 square feet of space in the building, giving Blackstone the opportunity to raise rents on approximately 300,000 square feet of prime New York office space. Additional tenants include Oak Hill Capital Partners and restaurant Aquavit.
Built in 1986, the 35-story tower is located in Midtown Manhattan at 65 East 55th Street.