Steven Schwarzman’s firm continues to expand its real estate portfolio.
Steve Schwarzman, Blackstone Group’s has reacquired the Park Avenue Tower in Manhattan for $750 million. The tower was purchased from San Francisco-based Shorenstein Co., which bought it in 2008 for $625 million. The building was originally developed by George Klein of Park Tower Realty.
Seven years ago Blackstone briefly owned the asset when it purchased Equity Office Properties for $39 billion, but sold the property soon thereafter when it chose to divest Equity of some of its New York assets in a $7 billion deal with Macklowe Properties.
Located at 65 East 55th Street, just west of Park Ave, the Tower is a thirty five story office building completed in 1986. It holds 615, 857 square feet of floor space. It was built in the romantic, modernism style and constructed of glass and ornamental metal panels alternating with polished rose and grey granite. The building features a signature crowning pyramid that is a lit fixture of the Midtown skyline.
The property’s upper floors have Central Park views and breathtaking cityscape views looking south down Park Avenue. A unique feature of the building is that it was designed as a “building-within-a-building” for IBM, allowing the current anchor tenant, Paul Hastings, to have its own address, entrance and lobby on 55th Street.
The building has two main entrances, one on 55th Street and the other on 56th Street. Both entrances lead to a stunning three-story lobby enclosed by a wall of glass on each end.
The good news for Blackstone is the buildings two major tenants are set to exit when their leases expire. This means that the firm can increase revenues as new renters will surely pay a higher rate for office space.
One of the two is the law firm Paul Hastings, the buildings single largest tenant, which rents 253, 000 square feet of space spread over 16 floors and even has its own entrance. Hastings’ lease is up in 2016.
The other, hedge fund manager Davidson Kempner which takes up 50, 000 square feet of space in the building, is already moving.
Founded in 1985 and based in New York City, the Blackstone Group L.P. is an American multinational private equity, investment banking, alternative asset management and financial services corporation. The firm specializes in private equity, credit and hedge fund investment strategies, as well as financial advisory services, such as mergers and acquisitions, restructurings and reorganizations, and private placements.
The company went public in 2007 when it sold a 12.3% stake in its ownership for $4.13 billion in an IPO.
In May it acquired the Cosmopolitan Casino & Resort in Las Vegas for $1.7 Billion in Cash from Deutsche Bank. Its Equity Office unit owns almost 200 U.S. properties.
Stephen Allen Schwarzman is the founder, chairman and CEO of the Blackstone Group. A self-made man from Pennsylvania, Schwarzman became a managing director at Lehman Brothers when he was only 31 years old.
The 67 year old investor has an estimated net worth of about $10 billion.
The Shorenstein Company, LLC, is one of America’s largest and oldest real estate firms. Headquartered in San Francisco, Shorenstein is a private company which currently owns and manages 25.9 million square feet of office and mixed-use properties.