By Roland Li
Verizon New York Inc. has sold a portion of 435 West 50th Street for $20.025 million, according to city records.
According to the property’s listing, around 101,000 s/f of the 299,534 s/f building was sold, including the 10th through 16th floors, and portions of the penthouse, ground floor and lower level. The basement of the building primarily houses switching equipment, while the top floors are offices.
The buyer was 435 W 50th LLC, an entity controlled by Michael Stern of JDS Development and Kevin Mahoney’s Property Markets Group (PMG), according to sources.
Sources said the new owners plan a residential conversion for the building’s top floors, taking advantage of the building’s location on the “cusp of midtown,” and the residential zoning. It was unclear by press time if the new owners had decided on condos or rentals.
Officials at JDS couldn’t be reached, and officials at PMG didn’t return a request for comment.
A spokesman for Verizon said that 435 West 50th Street was a “central office,” or a hub in the telephone and internet network. However, advances in technology meant that equipment required less space.
The sale required and gained approval from the state’s Public Service Commission approval, which oversees electricity regulations.
Verizon stated in Public Service Commissions filings that the portion of the property was no longer necessary for its operations. The company stated that it intended to use the proceeds for “general corporate purposes,” including the relocation of employees, maintenance and cost-cutting. As part of the deal, Verizon can lease back portions of the property for up to 12 months, and decided to retain an ownership interest in the building to house equipment. The property was shown to 5,633 prospective buyers, and offers were submitted to 70 of them.
David Noonan and Jennifer Schwartzman of Newmark Knight Frank’s capital markets group were the listing brokers. Noonan declined to comment.
The sale is the latest in Verizon’s disposition of its real estate assets, in an effort to cut costs and unload unneeded properties. As Real Estate Weekly reported in January, the Verizon sold 14 office condos at to New York University Langone Medical Center for $49.7 million.
City records show that in recent years, Verizon sold a portion of 50 Varick Street for $12 million, retail condos at 1095 Avenue of the Americas for $31.5 million to Equity Office, now owned by Blackrock, and 406 East 91st Street to the Convent of the Sacred Heart for $23 million.
Perhaps the most visible former Verizon property is 375 Pearl Street, a tower near the Brooklyn Bridge that has become notorious for its seemingly blank façade, which appears to be windowless. (It actually has three-foot window slits running down its sides.) Verizon sold for $172.5 million to Taconic Properties in 2007, and the developer planned to erect a glass curtain wall, designed by Cook + Fox.
But following the downtown, no such renovations were made, and the building sold again in February for $120 million to Sabey Corp., which plans to open a data center, according to Crain’s.