David Werner Buying 300 East 42nd Street

David Werner has been on a shopping spree buying up Manhattan office buildings at deep discounts. And now he’s at it again.

The investor just went into contract to buy the 235,000-square-foot building at 300 East 42nd Street for $52 million, sources told The Real Deal. That’s less than half the $122.5 million the previous owners had paid for the 18-story building in 2019, even before pouring in millions for improvements and amenities.

And while Werner has been actively buying older office buildings to convert to residential, that may not be his play at 300 East 42nd Street, at least not right away. The building has several long-term leases in place that would make it difficult to clear out for a conversion, people familiar with the property said.

Werner could wait out the leases and decide to convert the building later on. Or he could use 300 East 42nd Street as a destination to relocate tenants from other buildings that he’s converting.

A representative for Werner could not be immediately reached for comment. JLL negotiated the deal.

The seller is Fortress Investment Group, which took the keys to the building back from Keith Rubenstein’s Somerset Partners and Jeffrey Kaplan’s Meadow Partners back in 2023.

Somerset and Meadow had purchased the building in 2019 for $122.5 million, and borrowed from Brookfield to finance upgrades like a new entrance and lobby, elevators, mechanicals and façade.

Fortress refinanced the building two years later with a $110 senior loan and $27 million mezzanine debt. But apparently the borrowers ran into trouble and decided to hand back the keys.

Fortress hired JLL in 2023 to market the property. A Fortress spokesperson did not immediately respond to a request for comment.

Werner, meanwhile, has been on a tear buying up discounted properties.

His latest deal for 300 East 42nd, at the corner of Second Avenue, sits right across the intersection from the former Pfizer headquarters at 235 East 42nd Street, which Werner and Nathan Berman’s Metro Loft Development are converting into 1,500 apartments — the largest office-to-resi conversion in the country. The developers just secured a $135 million loan from Ran Eliasaf’s Northwind Group for the project.

In January Werner went into contract to buy the Durst Organization’s 340,000-square-foot office building at 675 Third Avenue for more than $100 million. The building sits on the corner of Third Avenue and 42nd Street, one block west from Werner’s other two deals, and is also likely being converted into rentals with Berman.

Further downtown, Werner last year teamed up with Lloyd Goldman’s BLDG to buy the office building at 100 Wall Street for $115 million — a deep discount to the $270 million the seller Barings paid in 2015. The building is yet another office-to-resi conversion.

Nearby, Werner bought 40 Fulton Street in 2022 for $101 million, after the seller Vornado Realty Trust had been eying at least $130 million for the property.

In Chicago, Werner in January teamed up with 601W to buy the distressed office building at 303 East Wacker for $63 million. The 30-story building previously sold for $182 million in 2018.

Werner’s known for pouncing when values are dropping and there are deals to be had. He was Manhattan’s most active buyer in 2014, inking mega deals like the purchase of 5 Times Square for roughly $1.5 billion and the Socony Mobil Building for roughly $900 million.

Despite his prolific dealmaking, Werner has largely stayed out of the spotlight. He’s known for bringing together groups of investors to finance his deals and for a particularly idiosyncratic quirk: Werner shows up to negotiations with two T-shirts. One with a smiley face that says “Aggravation free” and another with a frowning face that says “Free aggravation.”

The message: Werner will close deals quickly and with cash in an aggravation-free deal. But if the seller chooses to go with another buyer, they’ll get aggravation for free.