Sale of Iconic Manhattan High-Rise Exceeds $1B

By Gail Kalinoksi

New York City—GIC, Singapore’s sovereign wealth fund, is the new majority owner of 60 Wall St., the 47-story building in Manhattan’s Financial District that is Deutsche Bank North American headquarters. The global investment firm paid a little over $1 billion for the 95 percent stake in the 1.6 million-square-foot office tower in a deal with Paramount Group and Morgan Stanley that values the  Class A tower at $1.1 billion, or $640 per square foot.

60 Wall St. in NYC

That’s down from the $730 per square foot the tower traded at in June 2007 when Paramount and Morgan Stanley acquired the building from Deutsche Asset & Wealth Management in a sale-leaseback deal, according to Yardi Matrix data. At that time, the two firms paid $1.2 billion for the building with Paramount owning 62.3 percent and Morgan Stanley taking a 37.7 percent share. The announcement this week noted that Paramount most recently “managed and owned approximately 5 percent of the property through its ownership in certain private equity funds.”

Prior to the June 2007 transaction, 60 Wall St. was sold in November 2001 for $609 million to Deutsche Asset & Management by JP Morgan Asset Management.

Under the new joint venture with GIC, Paramount will maintain a 5 percent stake and continue to serve as the property’s manager.

“We believe GIC’s commitment to 60 Wall Street is reflective of its confidence in Paramount’s management team and the strength of the New York City real estate market,” Albert Behler, chairman, CEO & president of Paramount, said in a prepared statement.

In connection with the acquisition, the joint venture completed a $575 million financing of the trophy tower. The LEED Silver certified building was constructed between 1987 and 1989 and was renovated in 2012. Renovations included the installation of solar panels on the roof. The 122.4 kW solar photovoltaic array was the largest in Manhattan at that time.

While Deutsche Bank is the sole office tenant, the property also comprises 10,000 square feet of ground-floor retail.

“This investment reflects our long-term confidence in Downtown Manhattan, which is benefitting from over $30 billion of recent public and private investments in infrastructure and new construction,” Adam Gallistel, regional head of Americas, GIC, said in prepared remarks. “We believe 60 Wall Street is one of the top buildings in downtown and is poised to benefit from the ongoing downtown renaissance. We are also very happy to expand our partnership with Paramount, which is among the leading owners, operators and managers of Class A office properties in the U.S.”

Established in 1981, GIC has more than $100 billion under management. The fund manages Singapore’s foreign reserves and has investments in a wide range of asset classes, including real estate, private equity, equities and fixed income in more than 40 countries.

The firm has been active in recent years in the United States, making one of the largest industrial property transactions in December 2014, when it bought IndCor Properties from Blackstone for $8.1 billion. Soon after, it sold a 55 percent stake in IndCor to GLP, a Singapore-based provider of logistics facilities for an undisclosed amount. Also in 2014, GIC partnered with a group of investors to acquire the 1.1 million square feet of office space at Manhattan’s Time Warner Center for $1.3 billion. That same year, GIC joined with PSP Investments and the Ontario Teachers’ Pension Plan to invest $700 million in XPO Logistics Inc., a logistics provider headquartered in Greenwich, Conn. In November 2015, GIC invested in a joint venture with The Macerich Co., paying $1.5 billion for the majority ownership stakes in four shopping centers.