A consortium of investors led by Thor Equities LLC, a major New York City-based property developer, has agreed to purchase the retail and office building at 530 Fifth Avenue, Manhattan, for a deal worth $595 million.
The investor group, which includes general Growth properties (the largest mall owner of America) and RXR Realty LLC, is purchasing the building from sellers Rockwood Capital, Jamestown, Murray Hill Properties and Crown Acquisitions. The deal is expected to close by September, the sellers announced in a statement.
People familiar with the still-incomplete deal told Bloomberg that Thor Equities first negotiated an off-market deal for the 500,000-square-feet 26-storey building and later bought in General Growth and RXR. The investors will reportedly separate the office and retail portions of the building and divide operations among themselves.
The building has 480,000 square feet of office space which will be controlled by RXR Realty. Meanwhile, Thor and General Growth will run the retail portion that accounts for about 55,000 square feet of the total space, the source added.
The sellers, who were represented by Eastdil Secured LLC in the deal, reportedly made a good profit off the sale. They purchased the building in January 2012 for $395 million. The group also spent about $10 million on renovating the building. It is about 65 percent occupied and its tenants include Massachusetts Mutual Life Insurance Corp., a branch of J. P Morgan Chase and Fossil among others, reports Crain's Chicago Business.
Thor Equities has been snapping up a number of properties on the 20-block long Fifth Avenue stretch, Commercial Property Executive observes. The current purchase makes it the fourth investment for the firm. Thor now owns 590, 597 and 693 Fifth Avenue and the building at 545 Madison Avenue as well.
The Real deal reported that Thor and General Growth are preparing to partner to make another high profile purchase. They are planning to purchase the building at 685 Fifth Avenue from Gucci for more than $475 million.
Thor and other investors have realized the value of the commercial property market of New York City. While some think it is "overvalued" and "too expensive", most believe that it is worth it - according to the Mark Paneth's "Gotham Commercial Real Estate Property Monitor" survey.
"In short, the real estate community is saying commercial property in New York is expensive -- maybe too expensive -- but that it's probably worth it, if you can afford it and structure deals carefully," William H. Jennings, Partner-in-Charge of the Real Estate Group at Marks Paneth said in a statement.
