Republic National Bank takes over 546 Fifth Ave.
Jones Lang Wootton conducted the sealed bid. auction in which four bidders took part and were required to fully execute the contract with no contingencies. The deed was transferred in July. The purchase price reported to the city, which values the empty building at about $29.8 million, was a mere $445 over the mortgages due.
Safra National Bank of New York has already moved into the ground floor. That bank currently has offices on the sixth floor of 1114 Avenue of Americas and a retail bank facility in the lobby. Several sources said owners of this bank are partners in the property, while others denied this.
The trail is clouded by relationships, both announced and perceived. Safra National was established by the owners of Banco Safra, two brothers of Edmond Safra, the fiery Lebanese/Jewish financier who owns a little more than a 28 percent stake in Republic.
He also owned SafraBank of Miami, which was purchased for $30 million by the former Manhattan Savings Bank, now a thrift affiliate of Republic. There is no corporate connection between Safra National and Republic, said a spokesperson.
The law firm Kronish, Lieb, Weiner and Hellman represented the buyers. Walter Weiner, a name partner in the law firm, is currently chairman of Republic Bank. Jack Feirman, a partner in the real estate group of the law firm, said they are evaluating the building to determine the best way to derive some income.
"It's essentially a new building," he noted, referring to its reconstruction several years ago by its former European owner. He agreed the auction terms were unusual, but his clients were unmoved. "They are sophisticated people and went ahead anyway. It was a consideration."
Plans for the building may include the formation of a condominium. Some entity of the owners may also occupy up to 40,000 square feet of the 189,000 square foot building.
Peter Hauspurg, president of the brokerage Eastern Consolidated Properties, said the original 57,000 square foot building was on an underbuilt site.
The European run Greycoat Real Estate Corp., which still owns 1180 Sixth Avenue, purchased the property - which has a mere 50 feet on Fifth Avenue - in August of 1983 for $12.5 mill ion. They demolished "everything" and the architects Emery Roth & Sons designed the current 189,000 square foot 22-story glass tower which was completed in 1990.
At about $152 a square foot, Hauspurg said the new owners, Northwest 5th Realty Corp., "paid a very high price that most investors cold not match. But someone with a long term investment horizon and low cost financing will come out very well."
Ronald B. Bruder, president of The Brookhill Group, which acts as workout specialists and investment advisors, observed, "Five years ago, the building would have gone for 11 to 12 times earnings and the owners would have been getting $40 a square foot for leases. Now it's worth in the high $20's. It's gone down 50 percent in value. That's very noteworthy."
Area business leaders were enthusiastic about the purchase and the added cachet they will bring to the prestigious avenue.
Daniel Biederman, president of the Grand Central Partnership, explained the 45th Street block on which the property has its entrance is being brought into the Business Improvement District under an amendment that is about to be addressed by the city.
He is very pleased with the new ownership. "They are public spirited people," he said. "Republic is the only bank that has made a huge effort to add back office people to Manhattan."
The Fifth Avenue Association's president, Thomas Cusick, said, "I want to see that building alive and well, so anything that does that I'm very pleased with."
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|Title Annotation:||office building located in New York, New York|
|Publication:||Real Estate Weekly|
|Date:||Oct 13, 1993|
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