Lois Weiss

Lois Weiss

Real Estate

Investment stake in 60 Wall St. up for grabs

A majority, but passive, investment stake in the trophy office building at 60 Wall St. is up for grabs. Yet despite longer renewal options, its tenant, Deutsche Bank, is only on the hook for six more years.

Deutsche leases the building under a 2007 sale-leaseback deal with Paramount Group and a Morgan Stanley fund for $1.2 billion at the top of the market. But the 1.6-million-square-foot tower may only be worth that same figure now due to the deal structure, market competition and the future of the bank’s occupancy. The pricing would equate to $750 per square foot — still a hefty figure but half of what newer buildings have been garnering in Midtown.

HFF investment guru Andrew Scandalios has been hired to sell the stakes.

According to Real Estate Alert, Paramount owns 62.3 percent and would sell a portion of its stake but remain as general partner — putting the kibosh on a deal with competitive owners and repositioning specialists.

On the other hand, the Morgan Stanley Real Estate Special Situations Fund III would sell its entire 37.7 percent minority stake, making it attractive to other passive funds.

REA says net operating income will be $66 million this year or just over $41 per square foot. Despite an assessment cut of $16 million in 2015 and solar credits, because of the city’s quirky transitional assessments, the owners will still pay $1 million more in property taxes in 2016-2017, with a total of about $20.5 million, or $12 a square foot.

Matthew McDermott

Deutsche leased it back until June 5, 2022, as its North American Headquarters, and a lease memo revealed it also has five 5-year renewal options. Deutsche may also have an option to give up some of its floors next year.

The lease also contains the “right of first offer” to purchase the building. It is unclear whether the struggling Deutsche would pay a premium to regain control (which is unlikely) — or buy to flip to another operator.

Meanwhile, Deutsche has its own internal issues, including a $55 million fine for overvaluing derivatives and a newly revealed $10 billion Russian trading desk issue.

Developed in 1988 for JPMorgan, the 50-story tower bounded by Wall, Pine, Pearl and William streets was sold right after 9/11 for just $610 million as part of its merger with Chase Manhattan.

The parties either declined comment or could not be reached. Stay tuned.


Walk through the lower level of the Westfield World Trade shopping area inside the Calatrava-designed Oculus, find a certain spot to the southeast and then gaze up and west. Here the top of One World Trade appears within in the Wedge of Light window. Was that planned?

“No. Serendipitous,” said Christopher Ward, former executive director of the Port Authority and now with AECOM, at Westfield’s Eataly bash. Later, after sunset, walk outside along the newly opened plazas and marvel at the huge curved symphony-hall-like windows below the soaring points. The Calatravasaurus has earned its $4 billion wings.