UPDATED, Nov. 10, 10:33 a.m.: Slate Property Group and GreenOak Real Estate are in contract to buy the RiverTower in Midtown from Equity Residential for $390 million, according to sources.
Bucking the recent boom in condo conversions, the buyers plan to continue operating the building, located at 420 East 54th Street, as rentals. “Our business plan right now is to keep everything [in Manhattan] as a high-end rental. We’ll sort of see if that changes along the way,” Slate’s principal Martin Nussbaum told The Real Deal. Principal David Schwartz added that high-end condos are too vulnerable to market swings for Slate’s taste. “We don’t want to take the risk of the world billionaires who can live in New York or Hong Kong, Sao Paolo or wherever is the hot city of the moment,” he said. “We think that’s a little too risky for our investment thesis.”
CBRE’s Darcy Stacom and Bill Shanahan brokered the deal. The acquisition is by far the biggest deal yet for Slate, which has carved out a niche developing rental and condo buildings in Brooklyn and Queens and owns several smaller properties in Manhattan. The company, founded by Martin Nussbaum and David Schwartz, recently closed on the Quaker Sugar factory at 123 Hope Street in Williamsburg, where it plans to build a 125-unit apartment building. It frequently partners with Adam America Real Estate.
GreenOak has been an active investor in Manhattan real estate. In April, it bought the former Playboy Club at 5 East 59th Street in partnership with Capstone Equities for $85 million and last year dished out $300 million for a 49 percent stake in Chelsea’s Terminal Stores.
Equity Residential had been toying with the idea of selling the 38-story, 322-unit tower for a while. The Chicago-based REIT bought the RiverTower and two other Manhattan apartment buildings, 777 Sixth Avenue and the Longacre House Apartments at 305 West 50th Street, from then-struggling developer Harry Macklowe for a total of $475 million in February 2010.