Prime NY bldgs to be auctioned

Real Estate Weekly, July 7, 1993 by Therese Fitzgerald

Two significant New York City office buildings will be sold to the highest bidder at a nationwide 50-property auction on July 8.

While a number of major properties have been sold in court-supervised foreclosure auctions, this is the first time large Manhattan office buildings have been sold in a commercial auction.

The auction will be conducted by Grubb & Ellis/Rose Dove Auction Partnership. The properties are all being sold by the lending institutions that took over the properties from borrowers.

Located in downtown Manhattan's financial district, 5 Hanover Square is a 24-story, square-foot property built in 1962. It is 60 percent leased to, among other tenants, Reliance Insurance Co., Vista Concepts, Inc.(NYNEX subsidiary), AFCO Credit Corp. (division of Continental Insurance Corp.). The price for the property is in the $9 million to $12 million range and 65 to 75 percent seller financing is available, according to Jonathan Miller, executive vice president, and Miriam Halpert, a senior vice president, James Felt/Grubb & Ellis, agents for the property.

According to transfer records, the building, previously owned by the Kaufmans, is controlled by Riverbank America based in New Rochelle, New York. An $8.5 million mortgage includes the other properties in an assemblage: 66-74 Beaver Street and 113-121 Pearl Street.

The auction will also feature the New York City Fire Department headquarters at 240 Livingston Street in downtown Brooklyn. Built some 70 years ago, the 12- and eight-story brick and masonry building underwent an extensive renovation in 1982.

The agents for the Brooklyn building are Norm Livingston, senior vice president, and Vince Carrega, executive vice president, James Felt/Grubb & Ellis, New York.

Located on top of a subway station, the building, according to Livingston, has been 100 percent occupied for several years. The main tenant is the Fire Department, occupying floors 4 through 8. Other tenants include the Human Resources Administration, The Police Department and the District Attorney's office. Basement space and a 129-car parking lot are also used by the Fire Department.

The tenants, he said, pay roughly $15 a foot and the other buildings that could accommodate them in downtown Brooklyn--MetroTech, Pierpont Plaza, Livingston Plaza--are full.

"There are very few building with floorplates of 27,000 square feet in Downtown Brooklyn that can accommodate large users," he said. "...This building has never had a problem staying leased."

The property has a net operating income of $1.6 million and is expected to capture $13.5 million to $19 million at auction. Seventy-five percent seller financing will be available.

According to transfer records, the building is controlled by Bank of Tokyo. The previous owner was Mark Scharfman.

According to Miller, the Grubb & Ellis/Ross-Dove Real Estate Auction Partnership matches local real estate knowledge around the nation with auction expertise.