NEW YORK CITY — Hines has announced that a subsidiary of the Hines U.S. Core Office Fund LP has selected buyers for 499 Park Avenue and 425 Lexington Avenue, two trophy office buildings in Manhattan. The individual sales prices weren’t disclosed, but the combined sales price totals more than $1 billion. Hines has entered into purchase and sales agreements with each of the buyers and is anticipating closing both transactions in the summer.
“We are very pleased with the outcome of this competitive sales process,” says Sherri Schugart, senior managing director, as well as president and CEO of Hines’ Core Fund. “These trophy assets will deliver exceptionally strong returns to our investors.”
Hines’ Core Fund selected an institutional fund managed by American Realty Advisors as the buyer of 499 Park Avenue, a 28-story, 300,000-square-foot boutique office building. American Realty Advisors has more than $5 billion in assets under management. The firm’s portfolio includes office, industrial, multifamily, retail and other properties nationwide.
“499 Park is a one-of-a-kind asset, as is evidenced by the diversity and strength of bidders in this extremely active bidding process,” remarks Darcy Stacom, vice chairman and head of the Investment Properties group for CBRE’s New York office. CBRE and Eastdil Secured LLC jointly represented the Hines’ Core Fund in both transactions.
499 Park is located on the southeast corner of 59th Street and Park Avenue. I.M. Pei & Partners designed the building, which was erected in 1980. The building’s tenants include M. Safra & Co., Cantor Fitzgerald and Hines.
In the other deal, Hines’ Core Fund selected an institutional investor advised by J.P. Morgan Asset Management as the buyer for 425 Lexington Avenue, a 31-story, 750,000-square-foot office building. J.P. Morgan Asset Management has approximately $65.9 billion in assets under management and more than 400 professionals in the U.S., Europe and Asia, as of March 31, 2013.
“425 Lexington is the latest, trophy sale to demonstrate the immense investor depth and strength for well-located, core, Manhattan office buildings,” says Douglas Harmon, senior managing director of Eastdil Secured.
Helmut Jahn of Murphy/Jahn designed 425 Lexington, which is located across the street from the Grand Central Terminal. The building was delivered in 1987 and is fully leased by tenants such as anchors Simpson Thacher & Bartlett LLP and CIBC. Simpson Thacher & Bartlett recently extended its 595,000-square-foot lease for 15 years.
“We are excited to expand our relationship with American Realty Advisors through the sale of 499 Park Avenue, and to continue our long-standing global relationship with J.P. Morgan Asset Management through the sale of 425 Lexington,” says Tommy Craig, senior managing director of Hines’ New York office. “The success of these transactions only reinforces Hines’ commitment to continue to build on our high level of activity in New York City, particularly with further investment and development opportunities.”
Hines is a privately owned international real estate firm based in Houston. Hines has offices in 113 cities in 18 countries and controlled assets valued at approximately $24.3 billion.
— John Nelson