Oxford Properties, the real estate arm of a Canada-based investment firm, has reportedly agreed to purchase 450 Park Avenue, a 33-story tower in Manhattan for roughly $575 million.
At $1,700 per square foot, the deal is one of the most expensive ever for an office building on the island, according to The New York Times, which broke news of the transaction.
Oxford is buying the building from Somerset Partners LLC, which has owned and operated the building since 2007. However, details about the deal have not been revealed yet.
Oxford Properties is an active real estate investor in Manhattan with stakes in about seven properties in the area. It has also invested in a $15 billion mixed-use project on Manhattan's west side along with Related Companies.
450 Park Avenue
The building at 450 Park Avenue was previously known as the Franklin National Bank building. Shooting up to 390 feet and spanning an area of 247,236 square feet, the building has 33 stories designed to accommodate upscale retail and commercial offices.
Built in 1972 by Emery Roth and Sons, the tower was renovated in 2007 when Somerset Partners purchased the building. The firm paid $1,583 per square foot for the structure.
"We felt comfortable investing a large amount of cash in this quality location and asset. The thinking back then was this location was bulletproof, would withstand any downturn in the market and value would recover faster. Looking back, I guess we were right," Keith Rubenstein, a Somerset founder, said in an emailed statement to Bloomberg.
Commercial Real Estate Market
Indeed, the Manhattan commercial real estate market has become an investor hot spot, especially with the number of skyscrapers coming up in the area. Rents and prices of office space in New York City have soared in the recent past. In fact, The Big Apple ranked second on the Al Jazeera's list of cities that have shown the highest growth in the "Commercial Real Estate Boom."
In a recent report, the National Association of Realtors said that the commercial real estate outlook for 2014 is positive. However, the growth is slowing.
"Office demand is expected to see only slow and gradual improvement. Demand for retail space is benefiting from improved household wealth, while industrial real estate is stable with increasing international trade, which requires warehouse space. Of course, the apartment market fundamentals are the strongest, as nearly all of the new household formation in the past 10 years has come from renters, and not homeowners," Lawrence Yun, chief economist at NAR, said in an official statement.