Rialto Capital JV Closes $105M Manhattan Acquisition

45 E. 53rd St. Image courtesy of Newmark

A partnership between ZG Capital Partners and Rialto Capital Management has secured a $175 million capitalization package to finalize the purchase of Park 53, also known as 45 E. 53rd St. or Banco Santander Building in Midtown Manhattan.

In April, the joint venture inked a $105 million acquisition agreement for the 20-story boutique office tower totaling 129,000 square feet, according to the New York Post. The agreed-upon cost would mean a roughly 12.8 percent lower sale price compared to the late 2012 sale lease-back transaction when Santander Bank sold the office building to the current seller for $120.3 million, CommercialEdge data shows.

According to the same source, 15 office properties encompassing more than 3.2 million square feet traded throughout Manhattan in the first half of the year. More than half of these buildings are located within the borough’s CBD, with the average total sale price in the CBD – Primary area coming to $190 million.

Recently, SL Green Realty Corp. has completed the $445 million acquisition of 450 Park Ave., a mixed-use building totaling 337,000 square feet in Midtown Manhattan, just a few blocks from Park 53.

Newmark arranged the capitalization package, which includes a $120 million acquisition and development loan originated by ACRES Capital, and helped structure an equity of $55 million.

The brokerage team included Vice Chairmen and Co-Heads of the Debt and Structured Finance team Dustin Stolly and Jordan Roeschlaub, along with Senior Managing Director Daniel Fromm. Meanwhile, Eden Abraham and Michael Dorfman offered additional assistance in closing the deal.

A boutique office tower in Midtown Manhattan

Built in 1991 as the New York City headquarters for Santander Bank, the office building offers 7,646-square-foot floorplates. The tower’s long term single tenant will vacate Park 53 this fall, as the subsidiary of the Spanish banking group subleased 160,000 square feet of office space at 437 Madison Ave. from WeWork, with plans to consolidate its presence there, Commercial Observer reported.

Park 53’s new owners plan to update the Class A building. Renovation plans include an upgraded lobby, updated common areas and elevators, revised open-air spaces on the seventh and 11th floors, along with incorporating two additional amenity hubs.

ZG Capital Partners and Rialto Capital Management selected Newmark to lease Park 53. The leasing team includes Executive Vice Chairman Brian Waterman and Vice Chairman Scott Klau.