Eastern brokers sale of 250 Park South.

As proof of Midtown South's buoyancy, 250 Park Avenue South has recently changed hands through three local groups, landing in the portfolio of a family that owns the office building across the street.

According to transfer records, the Feil Organization, a quiet, privately-held company headed by Louis Feil that has been an investor and continual owner of city property since the 1930's, ended up paying a little over $12 million for the property, which was purchased from S.L. Green. The building is assessed about $5 million by the city.

Ralph and Joseph Bernstein had originally negotiated the deal last Fall and flipped the contract to Feil. Both deals were brokered by Eastern Consolidated Properties, with Charles Kingsley representing Feil.

When the property came on the market last August, although there was initially a lot of interest, including foreign, Green did not want to provide a due diligence period.

"He wanted someone to go hard on the paper," recalled Peter Hauspurg, chairman of Eastern Consolidated Properties. Although there were groups from Switzerland, Ireland and the United Arab Emirates along with locals scouring the halls, "the only people prepared to do that were Ralph and Joe Bernstein."

That contract was signed at midnight on a Friday in October. But in a matter of weeks, Jeffrey Feil made an offer to purchase it at a mark-up, and the Bernsteins agreed.

"It fits into their portfolio and makes sense," said one executive close to the Bernsteins on why they turned over the contract to Feil.

For the Feils, the purchase continued the family's long-term commitment to the city. "They are historically owners that keep properties," Kingsley noted. "They don't sell."

Kingsley said the family had watched the bottom of the market start to swing upward and "you sit in your office and say you've got to get in before it reaches the top."

He said the Feils will keep looking and buying until they feel the market is stretched too thin.

Jeffrey Feil simply said they purchased 250 because they "liked it" and it was across the street from 257, another building in their portfolio.

The 12-story, 122,000 square-foot 1911 building is situated on the southwest comer of the divided avenue at 20th Street. The lobby has a Neo-Gothic high-vaulted, ornate ceiling, and the outside has elaborate facade stonework.

It was owned by Bruce Berger in the 1980's. "I remember when Bruce sold it to Steve, he thought he was crazy," said Hauspurg. "Bruce was amazed at the price he got and Steve couldn't wait to get his hands on it."

The price, in October of 1988, was $791,500, according to transfer records. But Green, who couldn't recall the initial price, noted the property had since gone through a "number of refinancings and restructurings." He also invested huge sums in upgrading the property.

Green specializes in taking underperforming and tired B-class office frogs and turning them into leased-up handsome princes, and he saw 250 Park Avenue South as a way for him to obtain an avenue property.

"We had just been doing loft buildings on side streets," he remembered, "It had some vacancies and we thought we could create value."

He bought it, upgraded the mechanics, security systems, roofing, plumbing risers, electrical service, elevators, sidewalk, bathrooms, stonework, and installed tenant-controlled air-conditioning and operable Thermopane windows. More recently, he refurbished the elegant lobby, and by the time he was ready to sell it, had brought it to 100 percent occupancy. It was also "throwing off significant cash-flows," said Green. "That building had maxed-out our value and oar business is not just to hold properties."

Green is currently marketing other spruced-up properties in his portfolio and at the same time is going to contract on yet others that need work.

But other investors thrive on cash-flow.

"Steve Green put a lot of time and money into the property and it was a quality property," noted a New York Land executive.

Hauspurg said the building has a "spectacular facade," and is rented to almost all full-floor tenants because of the efficient floor plans.

A lot of the interest in 250 was generated because of the strong office market along Park Avenue South that has additionally benefitted from the re-awakening of the Flatiron District on the West, and the upscale residences around Gramercy Park, one block to the East.

The portion of Park Avenue South below 23rd Street is full of upscale restaurants, such as Canastels at 229, that service the architects, advertising executives and other businesses that inhabit the upper floors.

According to statistics provided by Cushman & Wakefield, at year end the Midtown South vacancy rate for Class A was 4.2 percent, and for Class B, 13.7 percent. The average asking rental rate was $19.83 for Class A and $18.53 for Class B. "It's one of the hottest rental markets," said Hauspurg.

Last year CS First Boston took 1.078 million square feet at 11 Madison, further anchoring the area and adding to its prestigious luster.