Commerzbank near deal for stake in FiDi office tower formerly known as 7 Hanover: Sources

By Adam Pincus

The German financial institution Commerzbank is near a deal to buy an interest in the Financial District office tower formerly known as 7 Hanover Square, and now known as 100 Pearl Street and 50 Water Street, according to sources familiar with the transaction. It is not clear if it’s a partial interest stake or for the entire building.

Commerzbank owns real estate through its subsidiary Commerz Real, which owns several large office properties in the United States, including 222 East 41st Street in Manhattan, and other assets such as the hotel at 11 Howard Street in Manhattan. Commerz Real invests in real estate through its hausInvest global fund.

Commerz Real’s Henning Koch, said in an interview with Wealth Management.com published in March 2021, that, “In the U.S. we are mainly interested right now in super core inner city offices.”

The deal, according to sources who are not involved in the sale, is expected to value the 970,000-square-foot asset at about $850 million to $900 million. That’s about triple the price GFP and the Northwind Group paid for it in 2018, which was about $308.5 million.

In October 2019, the owners obtained a $430 million secured and mezzanine loan from Square Mile Capital Management for the rehabilitation of the building, At the time of that deal, the ownership valued the tower at $620 million.

The property is majority owned by the Texas-based private equity firm TPG Capital, through its TPG Real Estate Partners, in partnership with the Gural family’s GFP Real Estate and Northwind Group. The parties did not respond to requests for comment.

A Cushman & Wakefield team including Doug Harmon and Adam Spies brokered the 2018 deal and is involved in this new transaction, according to sources. TPG declined to comment. The other firms did not immediately respond to requests for comment.

One portion of the building, known as 50 Water, which extends up to the 17th floor, comprises 526,552 square feet and is entirely leased to NYC Health + Hospitals through a 25-year deal.

The other 400,000 square feet of office space rises above that and is known as 100 Pearl Street.

The building is divided into a leasehold condominium with 15 units. The fee is owned by an entity that is an affiliate of the ownership, which leases the property under a 30-year lease. Two smaller condo units were sold to the New York Legal Assistance Group for $15.5 million.

This would not be Commerzbank’s first acquisition of a property leased to a hospital group in Manhattan. In 2018, the bank purchased 222 East 41st Street from Columbia Property Trust for $332.5 million, fully leased to the New York University Langone Medical Center.