219 East 42nd Street and 235 East 42nd Street
David Werner and his partners have secured a $150 million loan from Morgan Stanley to close on the Pfizer properties for $365 million. The deal includes the outright acquisition of 219 East 42nd Street (350,000 SF), and the leasehold position at 235 East 42nd Street (825,000 SF).
Acquisition Breakdown: Alexandria Real Estate Equities is Werner’s partner on 219 East 42nd Street, and the office building was valued at $200 million. When Pfizer’s lease expires in five years, Alexandria will become the sole owner. Unsurprisingly, the loan has a five-year term, according to TRD.
Leasehold Position: Deutsche Bank Asset Management is Werner’s partner on the purchase of the leasehold on 235 East 42nd Street. While Deutsche’s plans for the property remain unclear, the asset manager will hold the controlling interest on the lease, which runs for another 40 years.
The legend behind the deal… When David Werner stopped by RXR’s office a few years ago to pitch CEO Scott Rechler on a deal, Rechler invited his junior staff to join the meeting because he wanted them “to see a legend at work.” His true greatness is his ability to mitigate risk.
Moving Pieces: Pfizer signed an 800,000 SF lease at Tishman Speyer’s Hudson Yards development earlier this year. Upon the completion of the office tower in around 2022, Pfizer will relocate its global headquarters to 66 Hudson Boulevard (AKA the Spiral).
Worth Noting: The buildings benefit from the Midtown East rezoning, and present ownership with future redevelopment opportunities.