CALSTRS to Sell Stake in Downtown NYC Office 120 Broadway
Bloomberg reports: The California State Teachers’ Retirement System (Calstrs) plans to sell its majority stake in a lower Manhattan 40-story skyscraper co-owned by developer Larry Silverstein.
Calstrs, the second-biggest U.S. public pension fund, is seeking to profit from its 2004 investment in the national historic landmark office tower at 120 Broadway, according to a statement from its adviser, CB Richard Ellis Investors. Silverstein will hold on to his interest, according to two people with knowledge of his plan who asked not to be named.
In the emailed statement, Ryan Gill, a CBRE Investors spokesman, said the tower “has proven to be an excellent investment. Calstrs has a continuing good relationship with the Silverstein organization, but has decided to harvest some of the gains through the disposition of its interest in 120 Broadway.”
The offering may test the market for properties in downtown New York City, where only five office buildings have traded since the credit crisis deepened in the third quarter of 2008, according to Real Capital Analytics. Those deals include American International Group Inc.’s headquarters at 70 Pine Street and 72 Wall Street, and JPMorgan Chase's tower at 4 New York Plaza, data from the real estate research firm show.
At 120 Broadway, “a lot of the tenants there are pretty high quality, and the state has a lot of space,” said Ben Thypin, an analyst with commercial property research firm Real Capital Analytics. That will help it fetch a premium to deals such as 70 Pine Street, which traded at a discounted price of $103 per square foot because AIG was planning to vacate the property, he said.
The NY state attorney general has seven floors in the building. Other tenants include Bank of New York Mellon Corp., New York Life Insurance Co. and the Alliance for Downtown New York.
The tower, also known as the Equitable Building, was valued at about $300 million, or $173 per rentable square foot, when Calstrs bought its stake through CBRE Investors in 2004, according to Real Capital data.
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Posted by: Matthew Stone