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Canadian investment roars with $2.2B Bryant Park buy

By Dan Orlando 

Ivanhoé Cambridge and its partner, Callahan Capital Properties have purchased 1095 Sixth Avenue for a record $2.2 billion from the Blackstone Group and re-named it Three Bryant Park.

The price of the 1.2 million square feet of Midtown office space made the sale the largest single office building transaction since the GM Building was acquired for $2.8 billion in 2008.

Three Bryant Park
Three Bryant Park

“The opportunity to acquire a truly iconic property like Three Bryant Park is extremely rare,” said Arthur Lloyd, executive vice president, Global Investments Ivanhoé Cambridge.

“As we redeploy capital that has been rotated out of non-core assets globally, Three Bryant Park represents a cornerstone of our expanding U.S. office platform.

“It fits perfectly into our investment strategy of building a diversified portfolio of top-quality office properties in gateway U.S. office markets.”

“When we considered the quality and unique characteristics of this property, along with the continued enhancements in the immediate area around Three Bryant Park, it was clear this is a compelling long-term investment opportunity,” Tim Callahan, CEO of Callahan Capital Properties said.

“We continue to be very pleased with the progress we have made in expanding our U.S. office platform with Ivanhoé Cambridge, which now totals almost five million square feet in New York City and over 10 million square feet nationally.”

The building is currently completely leased and is primarily divvied up between MetLife, Verizon and Dechert LLP.

Quebec-based Ivanhoé Cambridge is at the forefront of a rush by Canadian investors into the U.S. real estate market.

Canadians invested $9.85 billion in U.S. commercial properties in 2014, according to Real Capital Analytics. No other country invested more, with China a far second at just under $6.6 billion.

Unsurprisingly, New York has been one of the most attractive destinations. In late 2012, Ivanhoe Cambridge dished out $360 million for a 49.9-percent stake in the office tower 1411 Broadway.

In a recent interview with Business Vancouver, Avison Young’s CEO Mark Rose argued that Canadian investors are drawn in by the fact that prices in the U.S. are lower and returns higher than in the booming Canadian market.

But that could well change if commercial property prices in Canada cool.

“I think there is sufficient pent-up demand in Canada, with a variety of investors waiting to get in at slightly better pricing,” he told the publication.
“This will ultimately result in a re-pricing of commercial real estate assets.”

Kevin Swill, COO of The Carlton Group., argues that general foreign attention in areas such as New York City will only increase in the coming year.

Swill said that his office has recently been fielding inquiries from across the globe regarding potential real estate investments in New York City.

“It’s not just the Asian market,” said Swill. “It’s also starting to be in some of the Latin markets. They feel that (New York) is a relatively safe market,” he continued, “a safe haven to be in.”

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