Manhattan real estate isn’t just pricey for homeowners, as evidenced by the sale of a tower at 5 Times Square for $1.5 billion recently, marking the highest price for its class in about four years.
Bloomberg News late Thursday reported that the tower, which serves as the headquarters for accounting company Ernst & Young, was sold by AVR Realty Co. to a group of partners headed by New York investor David Werner.
The price was 17 percent higher than what AVR paid when it bought the building from Boston Properties Inc. (NYSE:BXP) in 2007, the report said.
According to Bloomberg:
Buyer demand for high-quality buildings in the heart of midtown Manhattan has pushed office values in the area up 14 percent in the past year to peak levels, according to research firm Green Street Advisors Inc. In September, Norway’s sovereign-wealth fund agreed to buy a 45 percent stake in nearby 7 Times Square for $684 million from Boston Properties.
The 5 Times Square tower at Seventh Avenue and 42nd Street, known for the Ernst & Young sign with red letters down its side, was completed in 2002 and has 1.1 million square feet (102,000 square meters) of office space. The accounting firm is the primary occupant, according to AVR.
By dollar amount, the sale is the biggest of an entire building in New York since Google Inc.’s purchase of 111 Eighth Ave. in 2010, according to Real Capital Analytics Inc. Doug Harmon and Adam Spies of Eastdil Secured LLC served as investment bankers on the transaction, which was reported yesterday by the Wall Street Journal.