Cookie building's sweet deal.

Investors Angelo Gordon, of Belvedere Capital, and Irwin Cohen have sold 85 Tenth Avenue for the second time.

The pair, who purchased the office building as part of a five building portfolio in 1998 before selling it in 1999 and then buying it back again in 2003, will be parting with the asset this time for $300 million, well above what the asset had traded for in the past.

That sale price translates into roughly $500 psf for the 15-story, 600K s/f property; a sum considered lofty anywhere in Manhattan and indicative of Chelsea's rise as an office submarket.

Eastdil's Douglas Harmon brokered the transaction, selecting relative unknown Somerset Partners as the winner of what he had correctly anticipated would be a hard fought bidding war.

Commenting on the building in late April when the property was put up for sale, Harmon called the it a unique asset because of its amenities, leasing, floorplates, as well as its location in a burgeoning West Side corridor. The building attracted the attention of REITs, institutional investors as well as international investors, but Somerset managed to best the intense competition bids with a no-nonsense $50 million up front offering as part of an all cash deal.

"We weren't the highest offer, but we were the best offer," said Keith G. Rubenstein, director of equity investments at Somerset Partners. "When you have a big deposit and 100% equity, it takes away any questions about your ability to close."

Although 85 Tenth is Somerset's first foray into the Manhattan commercial office properties--the company is better known as a residential owner--Rubenstein said that the firm will continue to seek acquisition opportunities in Manhattan's successful submarkets.

"We plan to build a substantial portfolio," he said.

85 Tenth Avenue's tenant roster includes L3 Communications, backup facilities for Lehman Brothers, the Department of Homeland Security and also the New York Police Department. Famous chefs Mario Batali and Tom Colicchio are both opening restaurants on the building's ground floor.

L3 purchased the building in 1999 from Gordon and Cohen and, as part of a $150 million renovation to satisfy its technology requirements, outfitted the building with extensive Internet capability and onsite backup power generators. During the blackout, the building was alight and experienced no interruption of electricity. The property, now known as a high tech building, was originally a manufacturing facility for Nabisco, whose Oreo cookies were famously made on the premises.

The sale is only the latest in a succession of high priced deals the Chelsea market has seen in recent years.

Harmon brokered the $280 million sale two years ago of nearby Chelsea Market and the $775 million sale of 111 Eighth Avenue, which wound up being the biggest investment sales deal of 2004.

Harmon also handled the disposition of the five building portfolio, known as the ATC Portfolio, that Gordon and Cohen purchased in 1998. It has been estimated that that group of assets, which included 85 Tenth Avenue along with other buildings in Manhattan and Long Island City, netted roughly a billion dollars.