$3.95billion

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GlobeSt.com has also received confirmation that two otherMidtown towers, including Park Avenue Tower and 850 Third Ave., arechanging hands. Although oil-rich sovereign-wealth funds arebecoming a major player in New York City's real estate market duepartly to an exchange rate that is in their favor, domestic playershave not left the game.

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[IMGCAP(2)]An unidentified source confirms to GlobeSt.com thatSan Francisco-based Shorenstein Properties has purchased twoMacklowe Properties assets, including the 610,000-sf Park AvenueTower at 65 E. 55th St. and the 562,567-sf 850 Third Ave., for justshy of $1 billion. The source says that Shorenstein paid $930million for a 93.5% interest in the partnership that controls bothbuildings.

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[IMGCAP(3)]Shorenstein sources tell GlobeSt.com that they cannotconfirm the deal at this time, but an industry source close to thedeal tells GlobeSt.com that the two sales to Shorenstein "arepretty much done," adding that the properties are in contract andexpected to close June 30th. The source noted that the $930 millionnumber is accurate.

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In other Macklowe news, Paramount Group is set to takeMacklowe's 1.8-million-sf 1301 Avenue of the Americas for $1.45billion; however a Paramount spokesperson tells GlobeSt.com thatthey have "no comment regarding 1301 Avenue of the Americas." Butan industry source confirms that the Paramount Group deal is "inthe works." The source notes that the number is in the rightballpark, although "it might be a little low." Although 850 ThirdAve., Park Avenue Tower and 1301 Sixth Ave. are owned by Macklowe,since Macklowe turned over the properties to Deutsche Bank, theyare Deutsche deals. Deutsche Bank sources could not provideGlobeSt.com with confirmation.

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[IMGCAP(4)]Another anonymous industry source tells GlobeSt.comthat they think it is "a strong statement to the market when threedominant institutional players--Boston Properties, ShorensteinProperties, and Paramount Group-—step in to buy these assets forvery high prices." The source continues that "cap rates are in the4.5% range and pricing for the trophy assets is well north of$1,000 per sf."

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Foreign investors are also continuing to be a major player inManhattan real estate. As the New York Post reported thismorning, the Abu Dhabi Investment Council is negotiating to buy a75% stake in the 1.3-million-sf Chrysler Building for $800 million.The assets would be purchased from TMW, the German arm of anAtlanta-based investment fund. Tishman Speyer would reportedlyremain in charge of the building, with the Abu Dhabi fund acting asa silent partner. Queries to Tishman Speyer were unanswered bydeadline.

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Hugh Finnegan, an attorney in the real estate group at Sullivan& Worcester LLP, tells GlobeSt.com that there are a "plethoraof possibilities" as to why TMW would be eager to cash out of itsChrysler stake. Some potential reasons include that "they arelooking at other opportunities, they had hoped to get cash througha refinance but the market is against them, or the offer was toogood to pass up."

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He says that the Manhattan market is attractive to both foreignand domestic buyers. "The New York market has been relativelyimmune to the market correction going on pretty much throughout therest of the country," he says. "When the market gets strong again,it will be manifested in New York first. Both foreign and localinvestors are comforted by the ongoing stability of New York realestate."

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Finnegan says that he expects to see the trend of sovereignwealth funds looking to local trophy towers to continue. "They havecash, the exchange rate is in their favor and New York City remainsan attractive market."

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Natalie Dolce

Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.