Fifth Avenue sale.
Eastern Consolidated Properties, Inc. has sold the last remaining properties in of the IPA-portion of the Irving Schneider/Helmsley New York real estate portfolio. The transaction included the sale of the two office properties at 245 and 261 Fifth Avenue with a combined rentable space of 680,000 square feet. They were acquired for $135 million by a fund controlled by Koll Bren Schreiber Realty Advisors from IPA, a publicly held real estate company. The two properties at 245 and 261 Fifth Avenue constitute the remaining assets of what had been known as the "IPA Portfolio," which once consisted of over four million square feet of office properties in New York and Chicago.
The sale to Koll Bren Schreiber was brokered by Eastern Consolidated Properties, Inc. for the purchaser and by Helmsley Spear for the seller. Philip D. Restifo, executive director of Eastern's Mortgage Finance unit, with Peter Hauspurg, chairman of Eastern, represented Koll Bren Schreiber.
Founded in 1969 by Harry Helmsley and Irving Schneider, the IPA portfolio, much of which has been liquidated in the past several years, originally included five signature New York metropolitan landmarks, including 1440 Broadway, recently purchased by Max Capital for $152 million and a 50 percent share in 1328 Broadway, also known as the Marbridge Building, recently purchased by RFR Holdings, LLC. In addition to the two Fifth Avenue locations sold yesterday, the IPA New York portfolio also included the Mojud Building in Long Island City, sold recently for $6.5 million. The final remaining IPA sites include the newest IPA-acquired building, 570 Broad Street, a 190,000 square-foot, 14-story office building in Newark, NJ and two plots of undeveloped land in Houston, Texas.
Almost two years ago, Scogbell Acquisition purchased Harry Helmsley's interests from Leona Helmsley, which accounted for slightly more than 50 percent of IPA. Scogbell Acquisitions includes three major partners - Belvedere Capital, Scoggin Capital and Angelo Gordon and Company, who have joined forces with Irving Schneider, who stewarded the recent liquidation.
Originally, in January 1997, IPA began to market the portfolio as a complete package, attempting to sell all five New York buildings, plus five Chicago buildings, totaling over 2.1 million square feet - in addition to over one half million square feet in Newark, including 1180 Raymond Street, 570 Broad Street and 24 Commerce Street. The group met with every major owner-developer in the City and after the deal fell through at the 11th hour, IPA took all properties off the market and created a strategy for selling the properties individually or in small groups. The first to be sold was the Chicago portion of the portfolio, to Paul Beitler, for $121 million.
Regarding the most recent Fifth Avenue transactions, Glen Siegel, president of Belvedere Capital, commented, "As co-general partners, we supported Irving Schneider throughout the entire sales process. We were delighted with the results of the transaction involving these two properties as well as all of the liquidation results." Siegel added, "This particular transaction was very smooth and all of the parties involved worked hard to conclude the transaction."
The two recent Fifth Avenue transactions are most significant in that commercial office rents in Midtown Manhattan are skyrocketing, prompting office tenants to gravitate toward peripheral locations they might have once considered "out of bounds." While outside the traditional Midtown office corridor, 245 and 261 Fifth Avenue are being transformed from so-called "industry buildings," which once catered almost exclusively to the office and showroom needs of the housewares and carpet industries, to more diverse multitenanted office properties that are being positioned to attract conventional office tenants.
"These two properties are poised to capture their share of the continued migration of commercial office tenants to Midtown South and represent excellent value significantly below replacement cost," said Restifo following the transaction. "They are located in a neighborhood on lower Fifth Avenue that is transitioning from a secondary market for office users to a more traditional one, with restaurants, retail and residential development thriving as well as an increasingly diversified tenant base," he added.
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|Publication:||Real Estate Weekly|
|Date:||May 24, 2000|
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