Paramount Closes on $1B-Plus Tower Sale

NEW YORK CITY-In a more than $1-billion-dollar transaction, Paramount Group Inc. has closed on the sale of 1177 Avenue of the Americas, a 47-story granite office tower located between 45th and 46th streets. The purchaser is Silverstein Properties and its joint-venture partner, CalSTRS. Silverstein says that this purchase marks the third investment of Metro Fund LLC, the joint-venture between CalSTRS, a pension fund, and Silverstein Properties.

Eastdil Secured and Goldman, Sachs & Co. marketed the property on behalf of Paramount. CalSTRS was advised by CB Richard Ellis Investors.

Last year Metro Fund bought 575 Lexington Ave.–a 35-story office tower currently undergoing lobby renovations–and 99 Church St., which is being developed into a luxury hotel and condominium designed by Robert A.M. Stern to be completed in 2011.

Tenants at 1177 Avenue of the Americas include Pricewaterhouse Coopers LLC, and law firms Dickstein Shapiro Movin & Oshinksy and Kramer Levin Naftalis & Frankel. Construction on the granite building–also known as the Americas Tower–started in 1989 and was completed in 1992.

“We leveraged our property management and leasing expertise, along with 1177′s reputation as a preferred address for leading financial and legal firms, to increase occupancy to 97% and more than double the property’s value in only five years of ownership,” says Paramount Group’s president, Albert Behler, in a prepared statement. “We intend to re-invest these profits in accordance with our strategy to own premier CBD-located properties in key corporate cities around the US.”

Vic Bucchere, managing director and national head of acquisitions of CB Richard Ellis Investors notes that the purchase is a valuable investment in both the short- and long-term.