London Hotel $napped up
Blackstone sells luxe digs to Abu Dhabi group for $382M
BLACKSTONE Group has sold the London Hotel in Midtown to a sovereign wealth fund for $382 million, or $678,000 per room.
The Abu Dhabi Investment Authority, which also owns the Hyatt Times Square and the Marriott Edition on Madison Square Park, is expected to retain the current management team.
The Nov. 11 transfer included a direct sale of the 54story property for $194 million; the buyer assumed the mortgage of $154 million and purchased the furnishings and fixtures.
The ADIA also assumed the groundlease position owned by the Sol Goldman estate, which will receive a total rent of $157 million through 2136.
An Eastdil Secured team of Roy March, Larry Wolfe
and Mark Schoenholtz represented Blackstone in the sale.
Blackstone refurbished the 563room hotel, at 151 W. 54th St. between Sixth and Seventh avenues, after buying it from Lehman Bros. None of the parties returned requests for comment.
Retailer pullback has led to a decrease in the ground floor asking rents in seven of 17 major retail corridors, a new survey shows.
The drop in asking rents has, however, led to an increase in leasing activity as retailers are taking advantage of the space sales, according to the Real Estate Board of New York’s Fall 2015 report.
The largest declines were in Herald Square, along W. 34th Street from Fifth to Seventh avenues, and on Columbus Avenue, where asking rents dropped 16 percent to $375 per square foot from W. 66th to 79th streets and 7 percent from 72nd to 86th streets, where average rents are now $361 per square foot.
In Soho, rents along Broadway fell 15 percent, to $831 per foot, from Houston to Broome streets. Rents are now back to where they were a year ago before a sudden surge this past spring pushed them to $977 per square foot.
Along Fifth Avenue from 49th to 59th streets, the priciest area in the city, average rents are $3,397 per foot, down less than 1 percent from a year ago at $3,420. But rents are off 8 percent from the spring when they averaged $3,683 per square foot and ranged as high as $3,900.
Rents on Madison Avenue from 57th to 72nd streets dropped around 6 percent to $1,613 per square foot, from $1,700 earlier this year, but range up to $2,200 per square foot.
In the Times Square BowTie area, where rents now range from $2,000 to $3,000 per square foot, average rents are down 1 percent, to $2,390 per square foot, from $2,413 per square foot this spring, but up 3 percent from $2,317 a year ago.
“There is a sense that the market has softened a bit, so people are reluctant to lower their ask, and instead, keep it flexible in the negotiations,” said Mike Slattery of REBNY.
By contrast, two Broadway corridors — in the Financial and Flatiron districts — are seeing doubledigit bumps from a year ago.
From Battery Park up to Chambers Street, average asking rents are now $308 a square foot, up 16 percent from $265 a year ago, but up 32 percent from spring, when they retreated slightly to $234 a square foot.
That rise is credited to retailers such as Zara, H&M and Anthropologie, who are drawn to the new shopping destination near the renovated Fulton Transit Center.
“It is an emerging area with a lot of potential on tap,” Slattery said.
Similarly, in the Flatiron, retailers tired of higher pricing and few vacancies on Fifth Avenue, have turned to the parallel part of Broadway from 14th to 23rd streets, where average rents grew 17 percent since the spring, from $435 a square foot to $510, and a whopping 42 percent from a year ago.
Volt Information Sciences has reached a 10year deal for 14,686 square feet, comprising the entire 15th floor of 1133 Ave. of the Americas, where employees will get views of Bryant Park. The asking rent was $75.
The tenant was represented by David Mainthow, Jonathan Schindler and Aron Schreier of Cushman & Wakefield. The Durst Organization ownership was represented inhouse by Rocco Romeo and Tanya Grimaldo.
Volt, which handles staffing for IT and engineering technology as well as infrastructure services, will be moving from nearby No. 1065, aka 5 Bryant Park.
Developer Jeffrey Gershon of Hope Street Capital has locked up the entire southern blockfront of Atlantic Avenue, between Vanderbilt and Clinton, with 99year leases for two sprawling parcels at 529 Vanderbilt and 809 Atlantic. It is expected to take on a 550 Clinton address.
The site — home to ramshackle car washes and repair joints — is opposite the McDonald’s and the Pacific Park project. Up the block, a 2012era rental at 525 Clinton has shown the area is ripe for modern apartments.
According to the Real Deal, Gershon with AEW Capital has an upcoming condo proj ect farther west at 520528 Atlantic Ave., and another rental expected at 190196 S. 1st St. in Williamsburg.
Gershon did not comment.