By Daniel Geiger
Barclays has hired a team from CB Richard Ellis to sell 475 Fifth Avenue, according to sources.
The British bank took back the nearly 300,000 s/f office property in 2009 during the depths of the recession from a partnership between the landlord Joe Moinian and the real estate investment company Westbrook Partners, which had paid $163 million to buy the building during the boom.
Moinian and Westbrook defaulted on the property after clearing it out to create a high-end building, an idea that preceded the industry’s precipitous downturn and fell on disastrous timing when the market collapsed.
The move to market the property comes after L&L Holding Company launched a lawsuit earlier this month on allegations that Barclays had denied it an option to buy the property. L&L, a real estate management and investment company that owns several office buildings in the city, was originally hired by Barclays in 2009 to operate and lease the near-vacant property while the bank held it.
In a statement that a spokesman at Barclays forwarded to Real Estate Weekly on the suit, the bank denied that L&L had a right to acquire the building.
“L&L’s allegations are completely without merit,” Barclays said in the statement. “Barclays made an offer to L&L that fully complied with the terms of the agreement and L&L chose not to accept the offer before the Right of First Offer period expired. As a result Barclays no longer has any obligation to offer to sell 475 Fifth Avenue to L&L. We are confident that we acted at all times in good faith with respect to the terms of the agreement.”
Executives at L&L weren’t available for comment.
After the suit, Barclays replaced L&L in early May with a management and leasing team from CBRE to oversee the property. Darcy Stacom and William Shanahan, vice chairmen of CBRE, who lead one of Manhattan’s most prominent investment sales teams, will market the property and handle the sale for the bank. Neither Stacom nor Shanahan could be reached for comment by press time.
According to a person familiar with 475 Fifth Avenue and the investment sales market in the city, the building could fetch between $450 to $500 per s/f, a price that nearly equates to what the property sold for during the top of the real estate market. According to real estate experts, relative to the level of demand among investors, there is a dearth of commercial real estate available in Manhattan. The situation has driven prices beyond what current rents justify, although experts say that the leasing market is improving or is poised to rise, and deals must factor in this expected growth.
With real estate prices recovering, especially in strong real estate markets like Manhattan, Barclays has moved to divest itself of assets in recent months. In a deal first reported by Real Estate Weekly, the bank hired an investment sales team last month from Massey Knakal Realty Services, led by Massey Knakal’s chairman and co-founder Bob Knakal, to sell a development parcel on 10th Avenue.
The site, located at 356 Tenth Avenue, sits across the street from the west side rail yards, and has the air rights to accommodate over 300,000 s/f of commercial and residential development. Barclays took control of parcel in 2009 when Manhattan developer and owner Gary Barnett defaulted on the roughly $30 million loan he had with the bank.