Oxford Properties to buy NY trophy for $575m

Oxford Properties Group, the direct property arm of the $65 billion Ontario Municipal Employees Retirement System (OMERS), has entered into an agreement to purchase 450 Park Avenue from investment firm Somerset Partners for $575 million. The sale marks one of the highest prices paid for a Manhattan office building at approximately $1,789 per square foot, according to data provider Real Capital Analytics (RCA). The Toronto-based pension plan and New York-based Somerset both declined to comment on the transaction to PERE. 

 

Oxford’s purchase of the 33-story trophy in the Midtown East neighborhood is the second large New York transaction the pension has made in the past six months. In September, it partnered on the $1.37 billion purchase of 650 Madison Avenue with Crown Acquisitions, Highgate Holdings, Vornado Realty Trust and JPMorgan Asset Management. The Canadian pension also is solidifying its New York presence through its joint venture with Related Companies on the 17 million-square-foot Hudson Yards development project. 

 

The deal comes amid a surge of foreign capital into New York over the past few months, as international investors pay top prices to pick up some of the city’s prime real estate. In November, the Abu Dhabi Investment Authority and Singapore’s GIC Private Limited, in partnership with Related, purchased Time Warner’s New York headquarters for $1.3 billion. In October, Chinese conglomerate Fosun International purchased the landmark One Chase Manhattan Plaza from JPMorgan Chase for $725 million. Also in October, Ivanhoé Cambridge, the real estate subsidiary of the Caisse de dépôt et placement du Québec, purchased a 51 percent interest in 1211 Avenue of the Americas for $850 million. 

 

Somerset originally purchased the 330,000-square-foot property in 2007 from a joint venture between the New York State Common Retirement Fund and Taconic Investment Partners for $509 million. At the time, the transaction set a record for office buildings on a per-square-foot basis, according to RCA. Somerset implemented a repositioning program, bringing in such tenants as auction house Phillips de Pury, which now occupies the building’s ground, mezzanine and second floors. Somerset also moved its corporate headquarters to the tower in 2008.