California pension fund buys 685 Third Avenue

Real Estate Weekly, Dec 27, 2000 by Natalie Keith

The California State Teachers Retirement System has bought a revamped office building at 685 Third Ave. for $210 million, according to Clarion Partners, which represented the pension fund.

A combination of Insignia! ESG/and Cushman & Wakefield brokered the sale, which closed Dec. 14 and came to $320 a foot.

The 31-story, Class A office building has 650,000 square feet and is a block away from Grand Central Terminal and faces the new Chrysler Center. It consists of two towers, one built in 1961, and another in 1974. Over the past decade, the building has seen two ownership changes and efforts to improve its quality.

In 1994, American Home Products Corp. sold it to Professional Data Management Corp. for $50 million. It was occupied by Leucadia National Corp., which made some cosmetic changes to the building including sheathing the two towers in a single skin.

In June 1997, partnership between Amroc Investments and Blackacre Capital Management LLC bought the building for $100 million. Prior to the sale Emmes Asset Management, which specializes in turning around assets, served as the building's property and asset manager.

"At the time Blackacre bought it, it was 30 percent occupied and rents were in the mid-twenties," said Richard Cole, vice president asset management for Emmes.

"Now it's 93 percent occupied and rents are in the high fifties."

Winstar Communications, which leases 257,000 square feet, is the building's largest tenant.