Swig's $164m buy a win/win deal.

The win/win state of Manhattan real estate continues at the start of 2005.

REIT giant, Trizec Properties, sold the 32-story, 868K s/f 110 William Street on December 17, for $164.5 million, or roughly $190 per s/f to Swig Burris Equities, and both parties think they got a great deal.

Trizec sold 110 William Street for nearly double the price it paid in 1998, but Kent Swig, principal at Swig Burris, called the purchase an opportunistic buy. Considering Downtown's soon-to-be-realized additions to infrastructure and its searing residential development and leasing market--which is ushering in a 24/7 community--Swig feels the area is poised for an imminent transformation into one of the hottest real estate markets.

"I think Downtown is an undervalued market right now," Swig said. "Within the next three to seven years it's going to become one of the strongest markets. 110 [William St.] is a great long term hold for us." 2004 marked an amazing period of growth for Swig Burris as the firm went on a buying spree, boosting its holdings from 300K s/f to 2.6 million s/f in only 18 months. Although 110 William is 97% leased, its acquisition contributes to the company's newly expanded portfolio by adding potential space for smaller tenants.

"There's about 30K s/f of available space in the building and we expect to close a lease for some of that within the first month of 2005," Swig said. "This property is a valuable addition because it allows us to service a wider variety of tenants with different space needs."

Having freshly revamped 5 Hanover Square, re-skinning the base of the building with a glass curtain wall and installing new elevators, Swig Burris, known for its successful repositioning and renovation efforts, won't have to do much improvement on its newest acquisition.

Trizec boosted the building's initial 85% occupancy with numerous tenant build-outs and did an impressive job of repositioning the property. Its biggest success was perhaps enticing 110's largest tenant, the New York City Economic Development Corporation, which occupies the building's lower floors, to renew and extend its massive 269K s/f lease until 2017.

"They're a great tenant and I think that having them there dictated the price of the building," Swig said. "Trizec was really able to capitalize on that lease because having the EDC adds incredible stability to the property."

Trizec shopped around for bidders for 110 William Street, but the deal with Swig Burris didn't come as much of a surprise. The two are already partners in Midtown's 1114 Avenue of the Americas as well as 1411 and 1460 Broadway.

Tim Callahan, president and CEO of Trizec--which also announced the $55M sale of its Gateway Center in Pittsburgh on the same day--said, "These transactions enable us to continue building momentum as we actively pursue our portfolio objectives. They provide additional liquidity for the strategic repositioning of our portfolio."