Silverstein Properties and its new joint venture partner, a pension fund named the Califronia State Teachers’ Retirement System (CalSTRS), made its first splash together on the Manhattan real estate scene, snagging 575 Lexington Avenue for $400 million.
According to Silverstein Properties, the partnership allows for “$2 billion in buying power” in Manhattan real estate. The tower on Lexington is at the corner of 51st street, has 35 stories and 600,000 square feet. The building’s tenants include Cornell University, the law firm Boies, Schiller & Flexner and Radianz Americas, Inc., New York Sports Club and Staples.
CB Richard Ellis advised the transaction.
The full release after the jump.
SILVERSTEIN PROPERTIES AND CalSTRS ACQUIRE 575 LEXINGTON AVENUE
Partnership to Invest $2 Billion in Manhattan Real Estate
New York, October 3, 2006 – Silverstein Properties and its joint venture partner, the California State Teachers’ Retirement System (CalSTRS), closed on the deal to acquire 575 Lexington Avenue, a 35-story, 600,000-square-foot tower at 51st Street. The partnership purchased the Midtown office building for $400 million, or about $665 per square foot.
The acquisition of 575 Lexington Avenue marks the first under a new joint partnership between CalSTRS, a pension fund, and Silverstein Properties. The partnership provides Silverstein Properties with up to $2 billion in buying power to be used for acquisition purposes in the metropolitan area.
“For the past five years, Silverstein Properties has been focused on the World Trade Center, and will continue to devote enormous resources to the rebuilding effort. Having now built up our staff and coming off a successful agreement with the Port Authority on rebuilding the site, the timing on this new investment partnership with CalSTRS couldn’t have been better,” said Larry A. Silverstein, President and CEO of Silverstein Properties.
Silverstein Properties will also serve as the management company for 575 Lexington Avenue. Following in the company’s tradition of renovating Manhattan office buildings, the partnership will make a significant investment to upgrade various features of 575 Lexington Avenue, including the lobby, elevator cabs, lighting systems, and façade work.
“Silverstein Properties is a key player in the New York real estate market. We are confident that our partnership with Silverstein Properties will provide positive long-term investment returns for our members,” said Michael Thompson, portfolio manager with CalSTRS. CalSTRS has been Silverstein Properties’ partner in 120 Broadway since 2004.
The partnership was advised by CB Richard Ellis Investors, a wholly owned subsidiary of CBRE, in the acquisition of 575 Lexington Avenue. Vic Bucchere, Managing Director of CB Richard Ellis Investors, said, “The joint venture is a $2 billion vote of confidence in Silverstein Properties.”
Erected in 1958 by Sam Minskoff & Sons, the building at 575 Lexington was originally clad with gold-colored aluminum to commemorate the company’s 50th anniversary in the building business. In 1965, Koeppel Companies LLC purchased the building, and in 1989, rehabilitated it by having the 100,000 square feet of exterior re-clad into a deep bronze aluminum grid. The renovation also provided for a new lobby, elevators and storefront.
Major tenants of 575 Lexington Avenue include Cornell University, the law firm Boies, Schiller & Flexner and Radianz Americas, Inc. Retail tenants include New York Sports Club and Staples.
About Silverstein Properties
Silverstein Properties is a Manhattan-based real estate development and investment firm that has developed, owned and managed more than twenty million square feet of office, residential and retail space. In July 2001, Silverstein completed the largest real estate transaction in New York history by acquiring the 10 million sq. ft. World Trade Center, only to see it destroyed by terrorist attacks six weeks later on September 11, 2001.
Silverstein has committed to the redevelopment of the World Trade Center site. On May 23, 2006, Silverstein Properties opened 7 World Trade Center, a 52-story, 1.7 million square foot office tower, at 250 Greenwich Street, just north of the World Trade Center site. In April, 2006, Silverstein Properties started work on the Freedom Tower. In September, 2006, designs were unveiled for three new office towers on the WTC site – 250, 175 and 150 Greenwich Street – that will be developed by Silverstein Properties.
For more information, visit http://www.wtc.com.
With a $144 billion investment portfolio, the California State Teachers’ Retirement System is the second-largest public pension fund in the United States. It provides retirement, disability and survivor benefits to California’s 776,000 public school educators from kindergarten through community college. For more information, visit http://www.calstrs.com.
About CB Richard Ellis Investors
CB Richard Ellis Investors, LLC, a global real estate investment management firm with over $21 billion in assets under management, sponsors investment programs in the United States, Europe and Asia for institutional investors worldwide. In 2005, the firm closed $5.0 billion of new acquisitions throughout North America, Europe and Asia, and completed $2.3 billion in sales. As of June 30, 2006, the firm has closed $3.3 billion of new acquisitions, and completed $1.1 billion in sales.
CB Richard Ellis Investors is an independently operated affiliate of CB Richard Ellis Group, Inc. (NYSE:CBG), and harnesses the research, investment sourcing and other resources of the world’s premier, full-service real estate services company for the benefit of its investor clients and partners. Including partners and affiliates, CB Richard Ellis has over 300 offices in more than 50 countries. For more information, visit http://www.cbreinvestors.com.
– John Koblin