Agency Executions- MetLife Retained C&W As Exclusive Agent and Advisor

Metropolitan Life Insurance Company retained Cushman & Wakefield as exclusive agent and advisor to sell its 100% fee simple interest in The MetLife Building at 200 Park Avenue in midtown Manhattan, New York City. This 59 story trophy quality office tower comprises 2.8 million square feet and is fully leased to a roster of 50 blue chip companies in long term leases. Midtown Manhattan is the world's premier office market in terms of size, prestigious corporate and institutional ownership and tenants, and number of prominent class "A" office buildings. The MetLife Building is New York's acknowledged benchmark location from which all other midtown properties are measured.

- The MetLife Building- 200 Park Avenue, New York, NY

The acquisition of The MetLife Building at 200 Park Avenue embodies a number of distinctly attractive qualities, which collectively, represent a very unique investment opportunity:

- Having been sold only one time in its 43-year life span, 200 Park Avenue possesses a scarcity value, which exceeds any of Manhattan's premier office towers.
- The offering includes the fee, unlike most Park Avenue office properties, which are on leased land. As it would be impossible to acquire such a site today, the land's value is incalculable.
- Average in place office rents are approximately 33% below current market values.
- The MetLife Building at 200 Park Avenue boasts the highest tenant retention rate of any multi-tenant tower in New York. Historically, vacancies are quickly filled by existing users.
- At $610 per square foot, the sale price is below replacement cost, including a proxy value for the fee.

The Challenge

While 200 Park Avenue is a trophy asset that countless investors would want to own, the transaction timeline proved to be a significant challenge since the assignment was required to be completed within a 10-week time span. This short window, coupled with the requirement to post a substantial non-refundable deposit precluded interest from many capital sources such as pension fund advisors and offshore institutional investors. Pricing also proved to be a challenge as the land and replacement values cannot be accurately quantified, and value expectations pushed the marginal returns on equity into negative territory.

Our Impact

C&W's marketing process offered the asset without an asking price and received 12 proposals from highly qualified investors.

The Outcome

C&W successfully completed the assignment within the allotted time span despite the numerous challenges that accompany a transaction of this magnitude. MetLife achieved a $1.72 billion sale price which significantly exceeded their expectations. The MetLife Building is the largest single office building ever sold, and it was successfully completed in a record timeframe.

For more information contact:

Stephen Jones
(415)773-3570
Stephen.Jones@cushwake.com

Services:

Agency Executions

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