iStar-backed Safehold Inc., is in contract to buy the land under 425 Park Avenue as part of a flurry of deals in its aggressive push into the ground lease sector.
The company announced it has signed contracts for the acquisition of the existing ground lease at 425 Park Avenue for approximately $620 million.
Safehold said it has entered into a letter of intent with a sovereign wealth fund to form a joint venture to complete the acquisition, although the deal isn’t conditional on that happening. Safehold would own 55 percent of the venture and act as its manager.
The other deals include a student housing property in the Phoenix MSA and the Banknote Building in The Bronx, whose land it bought for $65 million, according to sources.
Savills Capital Markets represented Lafayette Avenue — a partnership that includes Perella Weinberg Partners, Capital Management’s Asset Based Value Strategy and Madison Marquette — in the deal. The JV acquired the landmarked property for $114 million in 2014.
L&L Holding Company is nearing completion of its massive redevelopment of 425 Park designed by Foster + Partners.
Citadel Enterprises LLC, one of the world’s largest asset management firms, will anchor the 47-story office tower with 331,800 s/f of space across 16 floors.
The project is the first full-block office tower to be constructed on Park Avenue in over half a century. It will rise to 897 feet and be capped off by three ornamental steel and glass fins.
L&L is partnering with Chef Daniel Humm and Restaurateur Will Guidara, the proprietors of the Michelin-starred Eleven Madison Park and The NoMad, on their third New York City restaurant, which will be situated at the base of the new tower.
Safehold is a REIT managed by iStar, which owns a controlling interest. Led by Jay Sugarman, Safehold targets the top 30 markets across multiple product types.
Sugarman has said he plans to revolutionize the ground lease sector by providing a new and better way for owners to unlock the value of the land beneath their buildings.
Since going public 18 months ago, SAFE has nearly tripled the size of its aggregate ground lease portfolio to approximately $1 billion.