Developer Underwater with Stamford, CT Buildings
The New York Post reports: Aby Rosen, the New York City real-estate developer and owner of trophy properties like the Lever House and the Seagram Building, doesn't make many missteps. He has a long record of buying property at distressed prices, sprucing them up and then enjoying top-level rents for years.
So it was unusual that 18 months ago he jumped at the opportunity to buy seven Stamford, Conn., office buildings at what turned out to be the top of the market - plunking down $850 million for 1.6 million square feet, an eye-popping $513 PSF.
These buildings were a part of Sam Zell's well-timed sale of Equity Office Properties, two years ago this month for $39 billion. Private-equity powerhouse Blackstone Group, which bought the company and then sold off most of the collection for about $21 billion, sold the buildings to Rosen.
Today that deal looks like a very bad bet. The buildings are now worth far less than what Rosen's RFR Holding paid. Stamford tax assessment records show the total value of one of the properties, 300 Atlantic Street, has plummeted 33 percent in just one year, from the sale price of $151 million in 2007 to $101.2 million in 2008. RFR's 177 Broad Street plunged 35 percent from $79 million when RFR bought it to $51.6 million last year.
Based on current conditions for investment sales, the portfolio's value has dropped 24 to 32 percent to between $575 mil. and $650 mil., according to an estimate from Real Capital Analytics. "It's never fun to buy at the top of the market, let's face it," said Dan Fasulo, managing director at Real Capital Analytics.
View the full article on The New York Post: Developer Underwater with Stamford, CT Buildings
Posted by: Matthew Stone