NEW YORK—A subsidiary of Hines U.S. Core Office Fund L.P. selected an institutional fund managed by American Realty Advisors as the buyer of 499 Park Avenue, and institutional investors advised by J.P. Morgan Asset Management as the buyers of 425 Lexington Avenue. Exact sale prices of each building were not disclosed; however, the combined sale price will total more than $1 billion.
The core fund has entered into purchase and sale agreements with each of the buyers, and it anticipates closing both transactions this summer. Both of the contemplated transactions are subject to customary closing conditions.
Eastdil Secured LLC and CBRE jointly represented the core fund in both transactions.
Tommy Craig, senior managing director of Hines' New York Office, said, "We are excited to expand our relationship with American Realty Advisors through the sale of 499 Park Avenue, and to continue our long-standing global relationship with J.P. Morgan Asset Management through the sale of 425 Lexington. The success of these transactions only reinforces Hines' commitment to continue to build on our high level of activity in New York City, particularly with further investment and development opportunities."
Sherri Schugart, senior managing director and President and CEO of Hines' Core Fund, said, "We are very pleased with the outcome of this competitive sales process. These trophy assets will deliver exceptionally strong returns to our investors."
499 Park, located on the southeast corner of 59th Street and Park Avenue, is one of New York City's premier boutique office buildings. The 28-story, 300,000-sq.-ft. tower was designed by I.M. Pei & Partners and was completed in 1980. The property enjoys a wide diversity of world-class tenants including M. Safra, Cantor Fitzgerald and Hines.
Darcy Stacom, vice chairman and head of the investment properties group for CBRE's New York office, said "499 Park is a one-of-a-kind asset, as is evidenced by the diversity and strength of bidders in this extremely active bidding process."
425 Lexington is a 31-story, 750,000-sq.-ft. office building designed by Helmut Jahn of internationally renowned architectural firm Murphy/Jahn. Located prominently on Lexington Avenue across the street from Grand Central Terminal, the class-A property has enjoyed 100 percent occupancy since its development in 1987, and the original anchor tenants, Simpson Thacher & Bartlett LLP and CIBC, continue to occupy the building. Earlier this year, Simpson Thacher & Bartlett LLP extended their 595,000-sq.-ft. lease in the building for 15 years, which will reset the lease to expire in 2033.
Douglas Harmon, Eastdil senior managing director, said, "425 Lexington is the latest, trophy sale to demonstrate the immense investor depth and strength for well located, core, Manhattan office buildings."