Seagram Building is sold

Real Estate Weekly, Dec 20, 2000

RFR buys monument for $375 million

RFR Holding LLC has acquired the Seagram Building in Manhattan. The 38-story landmark building at 375 Park Avenue -- the only New York skyscraper designed by legendary architects. Mies van der Rohe and Philip Johnson -- is situated diagonally across the street from another landmark trophy property owned by RFR, Lever House at 390 Park Avenue.

Given its architectural pedigree and the fact that three-quarters of its current roster of prestigious tenants possess below market leases set to expire within five years, the bidding war for the Seagram Building proved to be intense.

"We're very pleased and proud to say, 'It's all ours,'" Aby Rosen, a principal of RFR Holding LLC, said after his company closed on the purchase transaction with Teachers Insurance and Annuity Association. RFR paid approximately $375 million to beat out many of the city's largest and most prominent real estate owners.

"We saw an intrinsic value in this building that apparently others did not," Rosen said. "For us, this is a value-added play, and we are known as value-added investors. Based on the property's central location and superior design, we believe the building will always attract credit-worthy corporate tenants regardless of the ups and downs of the real estate market. When the current leases expire, we expect be able to re-lease the space at prevailing Midtown rates."

The 820,000-square-foot Seagram Building, located on Park Avenue between 52nd and 53rd Streets, has a tenant roster worthy of its location and history. Current tenants include Joseph E. Seagram & Sons, Inc., Alleghany Corp., Montgomery Securities, NASCAR, Fiat USA, Inc., Exxon-Moble Corp., DaimlerChrysler and The Four Seasons Restaurant.