Sixth Avenue Office Building Trades at Steep Discount
Norges Bank Investment Management and Beacon Capital Partners signed an agreement on August 28 to purchase 1177 Avenue of the Americas for $542.6 million, the transaction is expected to close in the 3rd quarter of 2025 according to the press release by Norges Bank. The fund that manages the Norwegian Government Pension Fund with assets worth about $1,800 billion dollars will be the majority owner with a 95% interest in the approximately 1 million-square-foot building that spans the entire 6th Avenue blockfront between West 45th and 46th Streets. According to city records, the building was sold in December 2007 for just over $1 billion dollars by Paramount Group to the entity 1177 Avenue of the Americas Acquisition LLC which is associated with Silverstein Properties. In July 2021, an article by The Real Deal indicated that 50% stakeholder UBS Realty Investors exercised a buyout option and sold its 50% to California State Teachers’ Retirement System (CalSTRS), which “already owned the other half of the property and now owns the entirety through a partnership with Silverstein Properties.” The valuation of the 2021 transaction reportedly represented a capitalization rate of roughly 4.5% and valued the 47-story tower at $860 million. The building’s anchor tenant is law firm Herbert Smith Freehills Kramer (formerly Kramer Levin Naftalis & Frankel), which signed a 15-year renewal in early 2017 for 265,000-square-feet resulting in a downsizing of its former 315,000-square-foot space according to news reports at the time.