Macklowe spree continues with $378m Park Ave buy.

Harry Macklowe's spending spree reportedly continues with a $387 million deal to add 300 Park Avenue to his billion dollar portfolio.

Just a week after officially inking a record-breaking $1.4 billion deal to buy the General Motors building, one of New York's sought-after trophy buildings, Macklowe is understood to be negotiating with Tishman Speyer Properties on the 758,000 SF of prime Park Avenue space. The 26-story commercial office tower--which is almost fully leased by Colgate-Palmolive--was not officially on the market, although sources say Tishman Speyer "quietly contacted" a select group of individuals it thought might be interested in owning a property in the heart of the prestigious Park Avenue submarket, directly across the street from the Waldorf-Astoria Hotel.

Macklowe, who has been described as an "ingenious" developer, is apparently interested enough to get around the table to talk money. The company declined to comment on the reports.

Tishman Speyer also chose not to comment on talk of a deal. However, many in the industry won't be surprised if Macklowe takes advantage of low interest rates to buy the building.

"There's not a lot of development going on at the moment and many traditional developers [like Macklowe] have become more purchase minded of existing buildings where they see a development opportunity or good long-term investment opportunity," said Woody Heller, managing director at Studley.

"Given the leasing profile at 300 Park Avenue, there's not a lot of near-term opportunity but, on a mid-term hold, there's tremendous opportunity on the building. A lot of the building is controlled by one large tenant. While it's unclear what that tenant's preferences are, in time, it seems likely there will be opportunity [for Macklowe] to control a lot of space."

Explaining that the current tenant has a mid-term lease below market rates, Heller added, "When those expire, there will be opportunity to materially improve income by finding new tenants or releasing to existing tenants."

Bill Shanahan, executive vice president and partner at CB Richard Ellis, agrees. "I think his strategy is to renew Colgate at a much higher rent. Knowing him--and he's an ingenious developer--I'm sure he has plans to re-do the retail to add additional value, just as he's done at 450 Madison and is doing on the GM Building."

On the reported $387 price tag, both men agree, it's not unreasonable.

"Macklowe is willing to pay more than someone else, but I wouldn't say it was an unreasonable price for Park Avenue," said Shanahan.

Heller added, "$516 a SF is not a huge number for a major asset such as this, particularly in context of what buildings have been selling for."

The secrecy surrounding the reported deal has also not come as a surprise. "The fact that it [300 Park Avenue] was not on the market is a practice that is becoming more common," said Shanahan, admitting he was in the dark about the roots of the trend.

"If I knew why it was happening, I would dissuade them, after all, I'm a broker."