Paramount Sells Minority Interest in 900 Third Avenue

Years of near or hoped-for deals have finally resulted in Paramount Group’s minority interest sale of 900 Third Avenue.

The real estate investment trust on Wednesday announced the sale of a 45 percent interest in the Midtown East office building. The firm did not name a buyer of the minority interest in the 600,000-square-foot property, which was valued at $210 million by the transaction.

Paramount remains the majority owner of the property with a 55 percent interest and will continue to be in charge of leasing the 36-story asset.

The sale of the building’s minority interest does not yet appear in property records. Paramount did not return a request for comment from The Real Deal.

Paramount has owned the building since buying it from a JMB Realty partnership in 1999 for $164.8 million. Three years later, it sold a minority stake to ING Office Fund, only to buy it back in 2012 for $172.7 million, giving the property a $352.5 million valuation.

By 2017, Paramount was again hunting a sale of a minority interest, shooting for a deal that could value the property at as much as $500 million.

In February 2020, Aby Rosen’s RFR Realty was in late-stage talks to buy the entire property for around $400 million. Paramount was even considering offering a big loan to finance the acquisition.

But then the pandemic arrived. Within a month of its onset, RFR was walking away from more than $600 million worth of real estate deals, including the acquisition of 900 Third Avenue.

As the pandemic and rising remote work reared their heads in recent years, the valuation dropped by more than half of what Paramount once believed it could be worth less than 10 years ago.

Paramount owns and operates commercial real estate in the New York City and San Francisco metro areas. As of September, the REIT and its lenders were in talks to sell a $402 million loan backed by a two-building complex in the Bay Area.