Pr o f i l e
The end of the Helmsley era After a $2 billion selling spree, the estate of Harry and Leona is now poised to sell off their final two New York City properties
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By Adam Pincus n a headline-grabbing deal in November, the Leona M. and Harry B. Charitable Trust sold the 605-unit Park Lane Hotel for $653 million. But what didn’t make it into the headlines was that the Central Park South property — which was picked up by an investment team that included the Witkoff Group, Jynwel Capital and Highgate Holdings — was the last crown jewel in the legendary estate’s New York City portfolio. The company behind the estate, long run by legendary landlord Harry Helmsley, and then by his widow Leona Helmsley, accumulated a massive property portfolio in New York City and across the country valued at $5 billion at the time of Harry’s death in 1997. Leona began to dismantle the 25-million-square-foot New York City empire right away. But when she died in 2007, there were still dozens of properties remaining. In the last four years, however, the estate sold off more than $2 billion of New York City assets in more than 20 transactions, an analysis of its sales by The Real Deal revealed. “When there is no one around with a motivated interest, it’s probably best for an insensitive executor to
manage cash [rather] than properties,” said Edward Minskoff, whose family has been in New York City development for several generations. In addition to the Park Lane sale, in October the estate sold its 63.75 percent interest in the Empire State Building, where it owned a majority interest in the iconic tower’s sublease, as well as a tiny interest in the partnership that owned the building’s “fee interest,” or the actual property, as distinct from the leasehold interest. Together those sales raked in $491.6 million for the estate. Now, with its crown jewels gone, the estate is poised to sell its very last property interests in New York City. Its stakes in the sub-leasehold of the 762,927-squarefoot office building at 112 West 34th Street and the leasehold at the 916,111-square-foot 1400 Broadway are expected to transfer to the Empire State Realty Trust, a recently launched real estate investment trust managed by Helmsley’s former partner Peter Malkin and his son Anthony. The stakes in those properties, which were tied up in litigation for years, are the last interests that the estate has, or will, sell to the REIT. It’s already sold seven others to the REIT, including the Empire State Building interest.
The Helmsleys in 1984. Harry Helmsley died in 1997. Leona Helmsley died in 2007.
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The Helmsley estate’s final property sales Property name/address
Property type
Ownership type/stake
Price
Buyer/Owner
Park Lane Hotel, 36 Central Park South
Hotel
100% of fee interest
$653 million
Witkoff Group, Jynwel Capital, Highgate Holdings, Macklowe Properties, Vector Group
Empire State Building, 350 Fifth Avenue
Office
63.75% of sublease
$491.6 million
Empire State Realty Trust
New York Helmsley, 212 East 42nd Street
Hotel
100% of fee interest
$313.5 million
Host Hotels & Resorts
Carlton House, 680 Madison Avenue
Hotel
100% of leasehold
$164 million
Angelo, Gordon Co. and Extell Development
1333 Broadway
Office
50% of leased fee interest
$82.1 million
Empire State Realty Trust
Lincoln Building, 60 East 42nd Street
Office
30% of leasehold
$52.6 million
Empire State Realty Trust
1350 Broadway
Office
32.5% of leasehold
$46.9 million
Empire State Realty Trust
Middletowne Hotel, 148 East 48th Street; and Buchanan Apartment, 760 Third Avenue
Hotel & Apartment
32% of fee interest
$41.6 million
Rao & Rao
Fisk Building, 250 West 57th Street
Office
35% of leasehold
$30.3 million
Empire State Realty Trust
501 Seventh Avenue
Office
59% of leasehold
$21.8 million
Empire State Realty Trust
225 West 23rd Street and 220 West 24th Street
Apartment
50% of leased fee interest
$18.2 millon
Rao & Rao
140 East 56th Street
Retail/Garage
50% of fee interest
$14.3 million
Schneider & Schneider
300 East 46th Street
Apartment
50% of leasehold
$10 million
Schneider & Schneider
Beekman, 575 Park Avenue
Apartment
40% of leased fee interest
$5.8 million
Benenson Capital Partners and David Baldwin Realty
385 Gerard Avenue (Bronx)
Commercial
35.6% of leased fee interest
$3.6 million
Rechler Equity Partners
1359 Broadway
Office
1% of leased fee interest
$1.7 million
Empire State Realty Trust
1001 Sixth Avenue
Office
33% of fee interest
n/a
Private owner
Lexington Towers, 160 East 88th Street
Apartment
50% of leased fee interest
n/a
Schneider & Schneider
Bricken Arcade, 225 West 37th Street
Office
16.67% of leasehold
n/a
Private owner
119 West 57th Street
Office
12% of leased fee interest
n/a
Private owner
Pfizer World Headquarters, 235 West 57th Street
Office
6.25% of leased fee interest
n/a
Private owner
112 West 34th Street
Office
50% of sub-leasehold
pending
Empire State Realty Trust has purchase option
1400 Broadway
Office
25% of leasehold
pending
Empire State Realty Trust has purchase option
Source: Properties are from a 2009 list filed with the Manhattan Surrogate’s Court in connection with the disposition of the Helmsley estate. Court records also included ownership type. Sale prices and owner data from city’s property records and data firm Real Capital Analytics. All properties sold between 2009 and 2013. Properties are referred to by names used during Helmsley ownership.
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www.TheRealDeal.com February 2014 49