Partnership Agrees to Purchase 44th St Building at 67% Discount

An agreement to purchase 321 West 44th Street for less than $50 million was recently reported. The pending sale of the roughly 220,000-square-foot Times Square building represents a roughly 67% discount of the $152.5 million paid by a Related Companies affiliate in December 2018. Upon transaction closing, the purchase by Empire Capital Holdings and Namdar Realty Group represents a “short sale, meaning Related and its lenders including Canadian Imperial Bank of Commerce, agreed to sell the property for less than the outstanding amount of the mortgage,” which was more than $100 million. News of the sale comes at a time when short sales have become more common in the office sector, citing the similar agreement of the April sale of 1740 Broadway between private equity firm Blackstone and its lender for $185.895 million to Yellowstone Real Estate Investments. At the time of the transaction, the building was encumbered by a $308 million mortgage. “Looming financing maturities and rising costs are starting to push more owners to cut their losses,” while banks, “who often don’t want to take over managing office buildings, are also incentivized to work with landlords on deals to find buyers for the properties, including short sales.”