NEW YORK CITY-Likely surprising the investor community—which has eyed 550 Washington St. for some time—majority stakeholder Eugene Grant has agreed to sell his 50.1% share of the 1.281-square-foot building, according to a Thursday report in the New York Post. The buyers are a group of three companies: Fortress Investment Group, Atlas Capital Group and Westbrook Partners; they reportedly paid about $250 million to procure the stake. The trio already owned the remaining portion of the building.
Grant was not represented by any brokers but did retain several attorneys for the deal, including Joshua Stein, principal, Joshua Stein PLLC and Lawrence Kobrin, senior counsel at Cahill, Gordon & Reindel LLP. Representatives for Stein did not respond to an interview request, while Kobrin declined to comment. The buyers were represented by Jonathan Mechanic, partner at Fried, Frank, Harris, Shriver & Jacobson.
The group is now weighing its options as full owners of the edifice, Mechanic tells GlobeSt.com. “Now they have the flexibility to do a lot of things,” he says. “The property been underutilized for some time, but now they have the capitalization and there’s flexibility on the usage and the zoning.
“They could do a hotel, tech/office, residential with a zoning change, or they could use it specifically for high-tech as there’s a lot of backup equipment already in place for existing tenants Bloomberg LP and Verizon,” he says. “It has great floor loads, power and floor heights so there’s a range of possibilities.”
The investors don’t have a particular preference about what the property will become Mechanic says. “They’re open. I think they’ll be talking to different people and seeing what makes the most sense.”
Bloomberg, the building’s largest tenant, renewed its lease for its 372,382-square-foot disaster recovery site last spring, according to the Post. However, most of the building now sits vacant, with nearly 750,000 square feet up for lease, it was reported.
There are also 290,000 square feet of air rights, which could tip the scales toward the development of an as-of-right hotel, more modern offices or for apartments with a zoning change. More commonly known as the St. John’s Terminal Building, 550 Washington straddles the trendy shopping and dining areas of SoHo and the Meatpacking District.
The structure spans more than three-city-blocks and is known for having Manhattan’s largest floors, a feature conducive to modern office space, notes the New York Observer. Built in 1933, it served as a terminal where goods could be carted to and from at one time and was the original terminus of the Highline.
However, the building was converted into office space decades ago, the paper says. It has been owned since the 1960s by Eugene Grant, a now 92-year-old investor who reportedly courted investors for many years and then regularly turned them away, the Observer reports.
Grant finally turned over his shares in the property due to tax rate concerns, the Post says.