Midtown South Portfolio Stake Trades for $74M

NEW YORK CITY-Princeton Holdings LLC has sold its stake in the 14-building F.M. Ring office portfolio, located mainly in Midtown South, for $74 million. A release announcing the sale identifies the buyer as “a major New York City real estate development and investment firm that will significantly boost its existing stake in the portfolio as a result of this transaction.” Additional financial details were not disclosed.

The Wall Street Journal and Crain's New York Business have both reported that the buyer was Extell Development, and that the total value of the one-million-square-foot portfolio, including 212 Fifth Ave. and 251 Park Ave. South, has been estimated at more than $500 million. GlobeSt.com's calls to Extell for comment were not returned by deadline early Thursday afternoon.

For Princeton Holdings, led by CEO Joseph Tabak, the deal represented a profitable exit from its two-year involvement with the portfolio. In 2011, a joint venture led by Princeton bought a 25% stake in the portfolio, which is 98% vacant, with a deposit of $10 million.

“Our investment philosophy at Princeton Holdings can best be defined as long-term with the ability to seize upon near-term exit opportunities if they are too attractive to resist,” Tabak says in the release. Two years ago, he continues, “we engaged in a process that will now unfold over the coming years without our involvement.”

Although Tabak counts himself “pleased” with the outcome of the deal, “it's clear that the portfolio will ultimately yield many rewards for those who have the fortitude to 'crack the code' here. As we have done before, we will re-invest the proceeds from this lucrative deal back into our core business of real estate investment and development.”

Doug Harmon, senior managing director at Eastdil Secured, represented Princeton Holdings in the sale, Crain's reported. The publication noted that the deal would leave Extell free to redevelop the properties as residential space.