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The real estate firm of Simon DeBartolo Group Inc. has begun soliciting bids for New York's General Motors building, a trophy office property in midtown Manhattan that is expected to sell for more than $750 million.
Possible bidders include Equity Office Properties Trust and Vornado Realty Trust. Other potential buyers include Boston Properties Inc., Toronto-based TrizecHahn Corp. and New York real estate investor Steve Witkoff.
The sale of the building is a key part of Simon DeBartolo's recently announced $4.8 billion acquisition of Corporate Property Investors, which owned the GM building and shopping centers around the country. Indianapolis-based Simon DeBartolo, which owns primarily retail assets, plans to complete the Corporate Property transaction in the third quarter and has said it hoped to sell the office building this year.
The real estate firm of Simon DeBartolo Group Inc. has begun soliciting bids for New York's General Motors building, a trophy office property in midtown Manhattan that is expected to sell for more than $750 million.
The prized asset, home of FAO Schwarz's flagship toy store, has elicited interest from some of the nation's most aggressive real estate investment trusts, said sources familiar with the situation.
Possible bidders include Equity Office Properties Trust and Vornado Realty Trust. Other potential buyers include Boston Properties Inc., Toronto-based TrizecHahn Corp. and New York real estate investor Steve Witkoff.
A first round of bids may be submitted soon, sources said.
"This will be a very quick process. A lot of folks have expressed interest," a person familiar with the process said.
The sale of the building is a key part of Simon DeBartolo's recently announced $4.8 billion acquisition of Corporate Property Investors, which owned the GM building and shopping centers around the country. Indianapolis-based Simon DeBartolo, which owns primarily retail assets, plans to complete the Corporate Property transaction in the third quarter and has said it hoped to sell the office building this year.
The sale of the 50-story building, at 767 Fifth Ave. on the southeast corner of Central Park, is expected to be one of New York's biggest real estate deals of the year.
Although still called the "GM Building," original owner General Motors Corp. sold the 30-year-old structure in 1991 to Corporate Property for $500 million. The carmaker still leases the lobby and two floors of the building.
The largest tenant is corporate law firm Weil, Gotshal & Manges, which occupies 11 floors.
"It's a trophy property. It's a building that commands some of the highest rents in New York. Everyone is going to be watching this very closely," said Jeffrey Cooper, senior director at real estate broker Cushman & Wakefield Inc.
Prospective bidders began expressing interest in the building several months ago when it became known that New York-based Corporate Property Investors was for sale, sources familiar with the situation said. Vornado, which was one of the interested parties, even teamed up with Rouse Co. in the heated bidding contest for Corporate Property that eventually was won by Simon DeBartolo.
DeBartolo declined to comment on the sale prospects.
Vornado and Boston Properties also declined to comment. Equity Office and Witkoff could not be reached for comment.
The building also has drawn overseas interest, but most people associated with the transaction doubted that a foreign buyer would succeed.
"I think it will go to a REIT or a partnership of REITs," said a person involved in the situation who declined to be identified.
Credit: Reuters
Copyright The Washington Post Company May 2, 1998