GFP, TPG pay $147.5M to DWS Group for office building in FiDi for resi conversion

The Gural family’s GFP Real Estate and TPG Real Estate Partners through the entity Broadway 2024 Propco, LLC paid $147.5 million to DWS Group through the entity Rar2-222 Broadway Owner SPE, LLC for the office building (O4) at 222 Broadway in the Financial District, Manhattan.
The deal closed on April 18, 2024 and was recorded on April 25, 2024. The property has 756,138 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $195 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
DWS Group then known as Deutsche Asset Management, bought the building in 2014 for $502 million. bought the property on September 25, 2019, for $1.1 million. The signatory for DWS Group was James E. Toney and Jeffrey R. Riemer. The signatory for GFP Real Estate and TPG Real Estate Partners was Martin Davidson. The contract date was February 22, 2024.

The Real Deal reported on the contract in March, and that it was a likely residential conversion for 600 to 800 units.  Deutsche Asset Management is now known as DWS Group. Deutsche Asset Management also operated afilliates such as RREEF.

Prior sales and revenue

GFP Real Estate in December 2022 purchased 55 Water Street, an office building, also for a residential conversion. In addition, GFP and partners bought out a former partner and brought in a developer to convert the Flatiron Building into residential condominium units.
The seller DWS Group had not purchased any other properties and sold one property in one transaction for a total of $21.1 million over the same time period.

The property

The office building in Financial District has 756,138 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 117 feet and is 237 feet deep with a total lot size of 33,339 square feet. The lot is irregular. The zoning is C5-5 which allows for up to 15 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $214.6 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received $10,435 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on March 6, 2013. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Financial District, The majority, or 74 percent of the 79.9 million square feet of commercial built space are office buildings, with elevator buildings next occupying 15 percent of the space. In sales, Financial District has the 5th highest sale turnover among other neighborhoods in the city with $2 billion in sales volume in the last two years. For development, Financial District is the 3rd most active neighborhood among other neighborhoods. It had 12.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 16 percent of the neighborhood’s built space.

The block

On the tax block, there was one new building construction project filed totaling 107,348 square feet. It is a 298-unit, 107,348 square-foot hotel/dormitory/shelter (R-1) building submitted by William Brodsky with plans filed June 26, 2015 and permitted March 3, 2016.

The majority, or 87 percent of the 986,988 square feet of built space are office buildings, with hotel buildings next occupying 12 percent of the space.

The buyer

The PincusCo database currently indicates that GFP Real Estate owned at least 15 commercial properties with eight residential units in New York City with 4,140,657 square feet and a city-determined market value of $840.2 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 97 percent of the 4,140,657 square feet of built space are office properties, with industrial properties next occupying 2 percent of the space. The bulk, or 98 percent of the built space, is in Manhattan, with Brooklyn next at 2 percent of the space.
The PincusCo database currently indicates that Tpg Real Estate Partners owned at least one commercial property in New York City with 112,500 square feet and a city-determined market value of $26.4 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single office property. It is located in Manhattan.

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