The sale of a portion of North America’s tallest residential tower has placed the value of the building at $1.05 billion.
TIAA-CREF, a financial services provider, has purchased 49 percent of the residential portion of New York by Gehry, the 76-story, 898-unit tower at 8 Spruce St., which opened in lower Manhattan’s hot residential market in 2011.
The original partners, Forest City Ratner Companies and NREA, are retaining 26 and 25 percent stakes respectively.
“The opportunity to invest in state-of-the-art, high-rise urban apartment complexes can be rare and we look forward to working with Forest City to maximize the value of this asset for our clients over the long-term,” Phil McAndrews, head of real estate transactions and joint ventures, TIAA-CREF, said in a statement.
The building was previously valued at $876 million. The recent transaction, however, values the high rise at $1.05 billion. “That’s a big number, and I think it reflects the robust rental market we’ve had over the past year, not just in New York but in the US,” said Jonathan Miller, president of the appraisal firm Miller Samuel.
The price also reflects the rarity of a large, multi-family property like 8 Spruce St in today’s market, he said. “There’s not much available. Inventory is tight for investment properties and demand is high, and that would drive up the value.”
Darcy Stacom, vice chairman at CBRE, represented the sellers in the deal.
“This was a rare and outstanding institutional investment opportunity to acquire an ownership position in a high-performing, prestigious property with one of the country’s finest developers,” Stacom said in a statement.
Earlier this month, the tower, with its distinctive, Frank Gehry-designed undulating façade, was named Skyscraper of the Year for 2011 by Emporis, a German organization that catalogues the world’s tallest buildings. Current rental availabilities in the building range from a $60,000 per month four-bedroom to a $2,750 per month studio, according to the listing site StreetEasy.com.
“Our goal has been to bring condominium-quality living to the luxury rental market, and it is clear today that we have succeeded,” Bruce C. Ratner, Chairman and CEO of Forest City Ratner Companies, said in a statement when the deal was announced. “Frank Gehry’s first-ever skyscraper has truly transformed the skyline, becoming a “vertical city” that emblemizes the vitality of Lower Manhattan as a burgeoning live-work neighborhood. It’s wonderful to co-invest with an institution like TIAA-CREF in this endeavor.”