350 Park sold for $541M.

Vornado Realty Trust acquired 350 Park Avenue from the Kuwaiti Investment Authority for $541 million last week. The 540,000 s/f building was sold by a CB Richard Ellis brokerage team led by Bill Shanahan and Darcy Stacom using an unusual single round sealed bidding process at the oddball sistence KIA that had prompted some brokers to question whether the property would yield top dollar.

According to the procedures of the auction, bidders had to shell out a significant deposit just to look at the building's leasing and financial information and were then allowed to make just one offer for the property. Some brokers feel that the single round bids process is ill-advised because it prevents the kind of bidding war that can ratchet prices beyond a sale's initial expectations.

The method differs markedly from the typical process employed for most major building sales in the city, which uses multiple bidding rounds and encourages a maximum number of participants. Instead, many were driven away because of the auction's stringent requirements.

KIA's last sale in the Manhattan, the $235 million disposition of 885 Third Avenue to Tishman Speyer in 2004, was executed in a single round bid that produced questions whether the authority had realized the building's maximum value. Only a year later, Tishman Speyer recapitalized the building based on a $335 million valuation of the property, over 40% more than what they had paid. Although Manhattan property had appreciated markedly in that time, some brokers and investors concluded that the building's jump in value could also be credited in part to a cushy sale price. The process worked better this time with most brokers concluding that Vornado had paid a fairly impressive price.