Trump and Galbreath will develop former G&W bldg

Real Estate Weekly, March 30, 1994 by Lois Weiss

Developer Donald J. Trump has teamed up with the Galbreath Company and the General Electric Investments Corporation to completely renovate the former Gulf and Western Building and reposition it as a luxury condominium tower. The property is owned by the G.E. Pension Trust.

"It's fully funded," said Trump of the up to $250 million construction costs involved in stripping the building to its girders and rebuilding the systems, fixtures and finishes, including what is expected to be a new glass curtain wall. "The apartments are going to be fantastic," he added.

A year ago, REW reported that GE was considering the condominium option, actually proposed to the company by Trump and Louise Sunshine, head of The Sunshine Group. At the time, area executives were concerned that West Side apartments in most new buildings were only achieving about $300 per square foot in sales prices and a conversion might not be a cost effective redevelopment of the outdated office tower.

Marketing studies conducted by The Sunshine Group, however, showed that Donald Trump's condominiums were obtaining sales prices at least $100 to $150 a square foot higher than the other comparables.

G.E. executives have now chosen Trump to be a part of their venture, hoping his name will help boost prices closer to the $1,000 a square foot mark that the effervescent developer has obtained at Trump Palace on Third Avenue.

Sunshine said their studies forecasted the building will average sales at over $700 a square foot, "which clearly means some apartments will be $1,000 a square foot and others will be $500 and $600."

Sources reported at least a dozen groups vied for the project, including Morgan Stanley, Fisher Bros., Sterling Equities, Goldman Sachs and Gerald Hines.

"It's absolutely a prize in terms of its potential as a residential building," said Sunshine. "I don't think any company like GE can unilaterally decide to do this size project with a developer without looking at other people."

The Galbreath Company has been the managing agent on the property for the last several years and became partners in the Trump proposal. Peter E. Ricker, president and CEO of the company, said they became involved in the marketing study this past summer and went through the competition for development along with everyone else.

Sunshine said she and Trump discussed the possibility of a conversion of a building a long time ago. "We went to Stamford," she explained, the site of the GE headquarters," and made a presentation to the GE group on converting the Gulf and Western building to residential use. They thought about it, and thought it was a good idea. This happened over a period of six months."

Then Ricker was assigned to head a study group that included Sunshine, Trump, architects, construction experts and engineers, to determine the feasibility of the conversion, along with the marketing and pricing of the building.

Architects Philip Johnson, Frank Gehry and Robert A.M. Stern are being considered for the transformation.

With an as-of-right development in the skeleton of the current 585-foot tall tower, the apartments are expected to have spectacular views across Central Park. Those views will be of construction cranes for a while though, as the Upper West Side heads into a building frenzy with three Millennium Partner buildings, a new project on the Mayflower Hotel site and land nearby, Manhattan West, Riverside South and the expected Coliseum redevelopment all getting underway over the next few years.

Although Paramount Communications' headquarters is in the building, it is expected to move out in 1995 to join its new parent company Viacom. Paramount became the corporate successor to Gulf and Western, whose headquarters has been in the building since 1971, when the 44-story tower designed by Thomas E. Stanley was erected on the site of the old WINS studios, where the late-disk jockey Murray "the K" Kaufman interviewed the Beatles.

While the construction is expected to be completed in 1997, Ricker said the marketing of the condos will probably begin this fall. "They will be spectacular," he said. "There isn't a bad apartment in this building."

Although exact pricing hasn't yet been determined, Ricker noted, "It's not going to be inexpensive. Trump thinks the top could go beyond $1,000."

While so far the building is to be known as One Central Park West, it is unlikely the venture's partners can expect that name to sell as well as one that includes the word "Trump." Real estate executives predict the Trump name will win out, and the property may be re-christened something like Trump West or Trump Circle, in deference to its Columbus Circle site. Odds are, however, GE will chose Trump Tower West to echo the world class magnificence of Trump Tower.

"It's going to be perhaps the most luxurious building ever built in this country," said Trump, never at a loss for accolades. "When complete, all of New York will be very proud to have it as a neighbor. It's a great honor for me to be working with G.E. and with the Galbreath Company," he added.