Ivanhoe Cambridge pays top dollar for Manhattan office tower

Ivanhoe Cambridge and its U.S. based joint-venture partner Callahan Capital have acquired 100 per cent interest in landmark Manhattan office tower Three Bryant Park from the Blackstone Group.

ThreeBryantPark-Ivanhoe-300The building sold for $2.2 billion, or about $1,800 per square foot,  the second-highest price ever paid for a single U.S office building, exceeded only by the sale of the GM Building at 767 Fifth Avenue in New York  for $2.8 billion in 2008.

Three Bryant Park is located at 1095 Avenue of the Americas in midtown Manhattan between 41st and 42nd Street.  The 41-storey, 1.2 million-square-foot office building, completed in 1972, occupies a 1.4-acre site and has direct access to New York City’s major transit hubs.

The building has a prime Manhattan business address and is 97 per cent leased to class-A tenants including MetLife, Verizon and Dechert LLP, among others.

Bryant Park

Eponymous Bryant Park is a 9.6-acre  privately managed public park located across the street from Ivanhoe’s latest acquisition (seen in picture). The park is constructed over an underground structure which houses the New York Public Library’s archives and the library itself is located within the park.

Three Bryant has undergone substantial recent redevelopment, including a new lobby, building façade, expanded retail and public areas.

“The opportunity to acquire a truly iconic property like Three Bryant Park is extremely rare,” Arthur Lloyd, executive vice-president, Global Investments Ivanhoé Cambridge, said in a statement.

“As we redeploy capital that has been rotated out of non-core assets globally, Three Bryant Park represents a cornerstone of our expanding U.S. office platform.”

Tim Callahan, chief executive officer of Callahan Capital Properties said: “We continue to be very pleased with the progress we have made in expanding our U.S. office platform with Ivanhoé Cambridge, which now totals almost five million square feet in New York City and over 10 million square feet nationally.”

Recent transactions

Ivanhoe Cambridge has been involved in several recent transactions as part of its plan to focus on asset classes that best meet its overall investment strategy.  It has been divesting itself of its hotel properties and is now down to six.

The company plans to keep Quebec City’s Fairmont Le Château Frontenac and Montreal’s Fairmont The Queen Elizabeth and W Montreal. It has also retained a 20 per cent stake in Toronto’s Fairmont Royal York Hotel after selling a 60 per cent share to KingSett Real Estate Growth LP No. 5 and the remaining 20 per cent to InnVest Real Estate Investment Trust in October.

“Our business plan calls for investing in 15 or 16 key cities around the world and building platforms with critical mass in those cities,” Ivanhoé Cambridge VP of public affairs and media relations Sébastien Théberge told Property Biz Canada in December. “We focus on what we know best: retail, office and multi-residential properties. We’re also in funds to diversify. We’ve also made our first investments in logistics with TPG in Europe.

“In order to generate the returns that our investors are seeking, we must strike the right balance between investing in core assets, which generate stable but lower returns in the single digits, and value-added assets which can generate above 10 or 12 per cent or more.”

Ann launched RENX in 2001 as a part-time venture and has grown the publication to become a primary source of online news for the Canadian real estate industry. Prior to…

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Ann launched RENX in 2001 as a part-time venture and has grown the publication to become a primary source of online news for the Canadian real estate industry. Prior to…

Read more

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