Midtown-based real estate firm Sovereign Partners is scooping up another Manhattan office building amid the toughest market for the sector in recent memory.
The company, led by the Sakhai family, is purchasing 780 Third Ave. for $178 million from investment manager Nuveen, according to a source familiar with the deal and reports. The property, located between East 48th and East 49th streets, was built in 1984, stands 50 stories tall and spans about 517,000 square feet, according to commercial real estate database CoStar.
It is 83.6% occupied, with tenants including finance firm Pomona Capital and coworking firm Industrious, and its estimated rents range from $64 to $78 per square foot, according to CoStar.
An Eastdil Secured team of Gary Phillips and Will Silverman brokered the transaction, which was first reported by The Real Deal.
Representatives for Sovereign and Nuveen did not respond to requests for comment by press time.
This is just the latest in a string of recent office purchases for Sovereign Partners. The firm also picked up 100-104 Fifth Ave. near Union Square last year for $127 million. The sale represented a huge drop in value for the property, as seller Clarion Partners had purchased it in 2013 for $230 million. Sovereign similarly bought the tower at 126 E. 56th St. for a major discount last year, paying $113 million for it after seller Pearlmark Real Estate Partners bought it in 2008 for $158 million.
But Nuveen, the $1.1 trillion asset manager for the Teachers Insurance and Annuity Association, appears to have sold 780 Third Ave. for at least a slight profit. TIAA bought the building in 1999, according to property records, and although the price does not appear on the publicly recorded deed, CoStar lists it as $161 million.
Nuveen recently carried out a $40 million renovation at 780 Third Ave. and rebranded the property as The Gardens at 780. The company has a sizable affordable housing portfolio as well and announced a deal last year to acquire roughly 12,000 additional units from former Major League Baseball star Mo Vaughn’s Omni Holding Co. for an undisclosed price.
Manhattan’s office market still faces major headwinds coming out of the pandemic. A recent study from the Partnership for New York City found that return-to-office rates had declined compared to last fall, and firms are leasing 14% less space on average compared to pre-Covid levels, according to JPMorgan.
Midtown’s office availability rate was 16.2% in May, and its average asking rent was $78.61 per square foot, according to data from Colliers.
Eddie Small , 2024-06-21 18:01:18
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