Equity Residential Buys Macklowe’s NYC Apartments

Equity Residential Buys Macklowe’s NYC Apartments (Update2) 2010-02-01 16:24:22.620 GMT (Adds Harry Macklowe as seller in first paragraph.) By Oshrat Carmiel Feb. 1 (Bloomberg) -- Sam Zell’s Equity Residential, the largest publicly traded U.S. apartment owner, bought two luxury residential towers in New York City and agreed to acquire a third from Macklowe Properties Inc. for a total of $475... [more]

Equity Residential Buys Macklowe’s NYC Apartments (Update2) 2010-02-01 16:24:22.620 GMT (Adds Harry Macklowe as seller in first paragraph.) By Oshrat Carmiel Feb. 1 (Bloomberg) -- Sam Zell’s Equity Residential, the largest publicly traded U.S. apartment owner, bought two luxury residential towers in New York City and agreed to acquire a third from Macklowe Properties Inc. for a total of $475 million. Equity Residential completed the purchases of River Tower, a 38-story apartment building on Manhattan’s East Side, and 777 Sixth Ave., a 32-story property in the Chelsea neighborhood, on Jan. 29, according to a statement today. The Chicago-based real estate investment trust also plans to buy Longacre House, a 26- story Midtown tower. “To have an investor like Sam Zell come in and buy 1,000 units in your market, it’s a shot of adrenalin,” said Dan Fasulo, managing director a Real Capital Analytics Inc., a New York-based firm that tracks commercial property sales. Equity Residential is selling in markets including suburban Denver, Vermont and Texas to raise money for acquisitions in higher-priced cities. In October, the company said it planned to sell $900 million of real estate this year and use the proceeds to buy other properties. “This transaction is yet another example of our ongoing strategy to add high-quality assets to our portfolio in core markets that position the company to benefit from improving apartment fundamentals,” David J. Neithercut, Equity Residential’s president and chief executive officer, said in today’s statement. Macklowe’s Exit For Macklowe, the sale may represent an exit from the rental apartment business. In 2008 the company was forced to relinquish control of seven Manhattan office buildings that had been owned by Zell’s Equity Office Properties. Macklowe bought the towers for about $7 billion, mostly in short-term debt, as Blackstone Group LP acquired EOP in 2007. The credit crisis left Macklowe unable to refinance and the company lost control of the Equity Office towers. It also sold New York’s GM Building to raise cash. Chairman and CEO Harry Macklowe turned over control of the company to his son William in 2008. William Macklowe declined to comment today. The three properties Equity Residential just bought have a total of 910 apartments; 23,339 square feet (2,168 square meters) of retail space; and 50,000 square feet of parking. The price equates to about $470,000 per unit and $545 per square foot of rentable apartments, Equity Residential said. For Related News and Information: Top Bloomberg News real estate stories: TOPR Stories on the U.S. property industry: TNI US REL Stories on the homebuilding industry: NI HOM U.S. Housing and construction data: HSST U.S. property industry stories: TNI US REL --With assistance from David M. Levitt in New York. Editors: Andrew Blackman, Sharon L. Lynch. [less]