By Daniel Geiger
Paramount Group is shopping a stake in 1633 Broadway to potential buyers just a month after consolidating its ownership in the midtown office tower.
The Germany-based real estate investment company held a majority interest in the 2.4 million s/f building, which sits between 50th and 51st Streets, before buying the other 49 percent share in the property in April from an investment partnership between Morgan Stanley and Merrill Lynch. The deal valued the building at around $2 billion according to published reports.
Sources say that Paramount is now looking to sell off a similar non-controlling portion of the building in a deal that could be worth as much as $1 billion or more and would likely include the purchase of equity and the assumption of part of the building’s mortgage.
Paramount has hired a sales team from the real estate services company Cushman & Wakefield led by Steve Kohn, who heads C&W’s debt structuring and recapitalization arm, Sonnenblick Goldman, to market the deal. Working with Kohn on the transaction are Alex Hernandez, Dave Karson. Helen Hwang, and Michael Henry.
Calls to Paramount were not returned by press time. C&W confirmed that it had been retained to sell the stake in the asset but would not comment further.
A person familiar with the offering said that the interest would likely attract institutional buyers because it will require a significant infusion of capital in exchange for stabilized returns, the type of limited upside that investors like pension funds are willing to accept in exchange for safety.
