By Daniel Geiger
620 Avenue of the Americas is being put on the market for sale, according to several sources familiar with the property.
The nearly 800,000 s/f building is owned by a partnership between the real estate investors Meyer Chetrit, Charles Dayan, and Yair Levy, who nearly lost the Chelsea property to foreclosure during the recession last year.
Instead, the owners held on and now appear to be selling in a market far different than the one they confronted during the downturn. Real estate values in the city have bounced back to near pre-recession levels as rental rates have risen and investors have clamored to buy property. The lack of assets on the market for sale has driven prices even higher sales, experts say.
The owners of 620 Avenue of the Americas have hired an investment sales team from the real estate brokerage company Eastdil Secured to market the offering and handle the sale. Aside from being one of the top brokerage companies in the city, Eastdil recently handled the trade of two nearby office buildings in Chelsea, 111 Eighth Avenue and the Starrett-Lehigh Building, which were two of the year’s biggest deals at nearly $2 billion and $1 billion, respectively.
Chetrit, Dayan, and Levy purchased 620 Avenue of the Americas in 2006 for $235 million. In late 2009, with the office market reeling in the wake of the financial crisis and tumult in the greater economy, the group defaulted on a mezzanine loan held by the real estate investment trust SL Green against the building. Adding to the problems, The Gap, which had its New York headquarters office in the property, decided to relocate downtown. Also, one of the building’s retail tenants, Filene’s Basement, declared bankruptcy and canceled its lease at the property.
It appeared likely that the group would cede ownership property to SL Green, which had used mezzanine loans to take over other office assets in the city, including 100 Church Street. But in early 2010, the partnership worked out a deal to pump in millions of dollars of capital to pay for the costs to lease the vacant space, in exchange for a roughly commensurate write-down on its loan with SL Green. The deal, which sources say put the building in the hands of Chetrit and Dayan while diluting Levy’s equity, kept the group in control.
Months later, a leasing team from the real estate services company Jones Lang LaSalle led by one of JLL’s top brokers Mitch Konsker, who the group had hired to fill the property, arranged to have the building workers union 32BJ take over 200,000 s/f of space there, filling much of the vacancy left behind by The Gap. The discount department store Marshalls also took up the large basement retail space left behind by Filene’s.