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NEW YORK CITY-Arbor Realty Trust Inc., as part of an investor group, has disposed of the 1.7-million-sf, 450 W. 33rd St. building. Broadway Partners will take the property for $664 million, while the previous owner keeps 2% ownership in the building and 50% of the facility’s air rights. In the partnership Arbor Realty had a 29% stake.

In a conference call this morning, Arbor Realty president and CEO Ivan Kaufman said he estimates returns between $75 million and $85 million in proceeds once the deal closes. Arbor Realty currently has a $45-million mezzanine loan on the 16-story, 85% occupied office building, and it remains to be seen if the loan will be assumed or repaid.

The $85 million the company could see as a result of this transaction, “will allow us to invest these funds in new long-term investments generating increased core earrings growth,” Kaufman said. The proceeds will be rapidly re-infused into the market, although Kaufman refrained from elaborating on deals in the pipeline.

Company executives said the retention of the air rights could produce a significant upside for the company in the future. Although Kaufman said the value of the air rights won’t be known for at least another 12 months as the office property in the area continues to be demanded of.

The disposition of 450 W. 33rd St., comes after weeks of speculation that this property and the Toy Building were being marketed together. The deal is expected to close in the second quarter. Kaufman declined to comment on any impending sale of the Toy Building.

As of 11:30 a.m., Arbor Realty stock rose $0.78 to $33.18 per share, less than $0.10 away the 52-week high of $33.28.

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