Two midtown Manhattan buildings to sell for more than $1 billion

Wed May 8, 2013 6:05pm EDT
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By Ilaina Jonas

NEW YORK May 8 (Reuters) - Two deals to sell two prime midtown Manhattan office buildings for more than $1 billion combined were reached on Wednesday - signaling another hike in New York City's commercial property values.

The pending sales by Hines, an international real estate firm, offer further evidence of the high prices U.S. commercial real estate are now commanding.

"We did think it was a propitious time," Tommy Craig, senior managing director of Hines' New York office, said.

The first property, at 499 Park Avenue, went to American Realty Advisors, which agreed to buy the tower for an institutional fund it manages, Hines said.

American Realty agreed to pay about $390 million, or $1,300 per square foot, for the I.M Pei & Partners-designed tower, situated at the corner of 59th Street and Park Avenue, a source familiar with the deal said.

That compares with $935 per square foot for the top 25 percent of Manhattan office buildings sold over the past 12 months, according to Real Capital Analytics.

Tenants in the 28-story, 300,000-square-foot property include Cantor Fitzgerald and Hines. It is the former headquarters of Bloomberg LP.

In a second deal, institutional investors advised by J.P. Morgan Asset Management agreed to buy 425 Lexington, a 31-story, 750,000-square-foot office building designed by Helmut Jahn.   Continued...