Hines has sold a 600,000-square-foot office building in New York City to Fosterlane Management for $485 million, slightly more than $800 per square foot. The purchase represents a return to the market for Fosterlane, the US institutional real estate investment arm of the Kuwait Investment Authority, which divested most of its direct property holdings in New York between 2004 and 2007.
One of a limited number of buildings constructed in the Midtown area in the last 20 years, the 34–story property at 750 Seventh Avenue was acquired by Hines and an undisclosed institutional equity partner in 2000 from Morgan Stanley, the building’s owner since 1994 and a long-term tenant occupying more than half of the building. Over the course of a decade of ownership, Hines has kept the building fully occupied and extended all of the leases in the property on a long-term basis.
Tommy Craig, senior vice president at Hines, said in a statement: “We are happy to have selected Fosterlane as the new owner of 750 Seventh Avenue, as we share a 30-year history of successful real estate investment and development together. Our success with this asset only further reinforces our confidence in New York City as the strongest real estate market in the US.”
Indeed, Hines and Fosterlane jointly carried out the development of a portfolio of properties in the New York area during the 1980s and early 1990s, including 31 West 52nd Street and the Lipstick Building at Third Avenue and 53rd Street. Those projects helped to establish the Houston-based firm’s presence and reputation in the New York market.
Meanwhile, Hines continues to be active with other development projects in New York. The firm currently is working on a commercial building at 1045 Sixth Avenue with Pacolet Milliken, as well as developing a mixed-use tower at 53 West 53rd Street, adjacent to the Museum of Modern Art.