MetLife selling spree: $2.6b: Tishman Speyer pays $1.7b for 200 Park Ave.The MetLife building's $1.7 billion sale to Tishman Speyer Friday may have made it the most expensive single asset ever traded in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , but per s/f, the 58-story tower was over $100 cheaper than the General Motors building, whose $1.4 billion sale price in 2003 set a previous high water mark for the price of a single property. Even though the 2.8 million s/f MetLife building The MetLife Building, originally called the Pan Am Building, is a skyscraper located at 200 Park Avenue in New York City. History The Pan Am Building was the largest commercial office building in the world when it opened on March 7, 1963. doesn't command the $100+ per s/f rents that the GM building does, Tishman Speyer bought into a 4.8 cap rate as compared to the GM's ultra low 4.5, a disparity dis·par·i·ty n. pl. dis·par·i·ties 1. The condition or fact of being unequal, as in age, rank, or degree; difference: "narrow the economic disparities among regions and industries" that left some investment sales experts surprised the MetLife building didn't yield a higher price. "I thought the MetLife building could sell for closer to $2 billion," said Benjamin V. Lambert, president and founder of Eastdil Realty realty n. a short form of "real estate." (See: real estate) REALTY. An abstract of real, as distinguished from personalty. Realty relates to lands and tenements, rents or other hereditaments. Vide Real Property. , who brokered the 2003 sale of the GM building for Conseco. "That's not to say that this isn't an impressive price, but I thought the bidders would drive the price up further on this one. This building, like the GM, is probably part of around four or five buildings in the city that you'd have to say are the absolute top of the top. They both have great potential for the future." Studley broker Woody Woody Slang to describe when the market has a strong and quick upward movement. Notes: For example, you'll hear "the market has a woody," when the market is performing well... seriously, we don't make this stuff up. Heller indicated that while the building, which has bore MetLife's logo in iconic i·con·ic adj. 1. Of, relating to, or having the character of an icon. 2. Having a conventional formulaic style. Used of certain memorial statues and busts. fashion since the early 90s and will continue to do so after the sale, may not have matched the GM building "pound for pound," the fact that its sale yielded a sub 5 cap rate still is an impressive feat for the seller. "This price is a fabulous accomplishment for the seller," Heller said. "What one would expect for a building as marvelous and important as this. One would think that a building like this in today's market would sell at a 5 cap or a sub 5 and it did." John Calagna, spokesman for MetLife, indicated that the insurance firm was satisfied with the price for the property, which some appraisers valued at $1.8 billion before the sale was conducted. "We were very happy with the interest shown and the reaction from the market," Calagna said, adding that MetLife would use the proceeds from this sale and the $918 million sale of 1 Madison Avenue Madison Avenue, celebrated street of Manhattan, borough of New York City. It runs from Madison Square (23d St.) to the Madison Bridge over the Harlem River (138th St.). In the 1940s and 50s, some of the major U.S. to SL Green two weeks ago to help finance its upcoming $11.5 billion purchase of Travelers Life & Annuity annuity: see insurance. annuity Payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. from Citigroup. To expand on the tight 4.8 cap rate for the well-leased and tenanted property, Tishman & Speyer will have to exercise their utmost creativity according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Lambert. "One of the things you look at is how all the non-tenant space is being utilized," Lambert said. "The non-office tenant space. Could you expect to upgrade the revenues from the retail tenants and use more efficiently some public space in that building? Those are clearly things that one would look at." Lambert mentioned that Tishman Speyer was uniquely qualified to realize the maximum value from this type of property given its track record. "Not to suggest that the other bidders wouldn't have done it as well, but Tishman Speyer have done it in more situations than some of their competitors and have a real mastery," Lambert said. Tishman Speyer was joined by Mackelowe Properties, owners of the GM building, and Reckson Associates in the final round of bidding, a diverse mix that individual profiles show that rising interest rates haven't truncated truncated adjective Shortened the competition. "Reckson is a public company, Tishman Speyer is a private company with institutional backing, and Mackelowe is a private individual," Heller said. "So in the final three you have a wide representation of three different styles of buyers and I think that's indicative of what the market is composed of." |
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