The Class A office tower at 300 East 42nd Street is expected to sell for well below its previous valuation after its owner, Keith Rubenstein’s… Somerset Partners And Jeffrey Kaplan Marj PartnersIt resorted to handing over the 237,000-square-foot building to its lender. Qalaa Investment Group.

The venture purchased the 31-story tower in August 2019 for $122.5 million, taking out a loan from Brookfield and pumping millions of dollars into capital improvements and amenities including a reimagined entrance, new lobby, elevators, mechanical and facade work as well as rotating art. In the hallway.

At the time, Rubinstein told the New York Post: “There are large balconies for the building and we will create a large space for rest in the lower part.”

But the building, which is being marketed by JLL, is located on the southeast corner of Second Avenue. Although the Grand Central Terminal area has become a sought-after office district since the Long Island Railroad opened and commuters have been nervous about the coronavirus on subway connections, 300 East 42nd Street is too far east for many renters in a market full of other options.

Last year, with Newmark taking over leasing the building and seeking $60 rents, architecture firm CannonDesign and The Jamaican Consulate signed the leases – The address is near the United Nations – but 300 East 42 could not maintain the momentum.

fort Refinancing the building In late 2021 with a senior loan of $110 and mezzanine debt of $27 million.

In June 2022, CannonDesign’s broker, Geoffrey Peck of Savills, told… Commercial Controller“Cannon realized that this was a typical Grand Central building but with ownership behind it that treated it like a first-class memorial building. It’s not often that you get a building that represents more value and also has a property that’s creative enough to attract upscale tenants.

But the current owners are on their way out.

“We are still working with Fortress and trying to create as much value as possible.” Rubinstein Tell The real deal Via text. “We leased 60,000 square feet last year and have a couple of deals we’re working on. It’s really a great building.”

Like other Class A properties, it has seen an uptick in tours over the past few weeks as is typical after Labor Day. But the decision to Let the drug go It is an increasingly common result as a value Distressed office buildings falls under Existing debt For real estate, interest rates remain high and the potential for a rental shift is diminishing.

Rubenstein previously owned 450 Park Avenue, which he bought for $509 million in 2007. Sold for $575 million In 2014.

He also bought huge swaths of the Bronx’s Mott Haven district, bringing in local retail and restaurant tenants while selling off portions that have since been developed with several residential towers.

He is also working on plans to redevelop the expansive, picturesque grounds of the former Nevele Hotel in the Catskills into an upscale retreat of homes.

JLL and Mido Partners declined to comment.

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