David Werner has officially closed on One Dag Hammarskjöld Plaza after locking in a $250 million loan to finish the purchase of the Midtown East office tower. The 50-story building at 885 Second Avenue spans roughly 870,000 square feet and is nearly 30 percent vacant, and Werner plans to pour about $60 million into renovations and leasing to push that number down. The buy is the latest in a run of steeply discounted Manhattan office plays by Werner and his partners.
According to The Real Deal, JPMorgan provided David Werner Real Estate Investments with a $250 million loan to close the roughly $270 million acquisition, and the financing lifts total capitalization to north of $330 million. The outlet reports that Werner plans to invest about $60 million to upgrade and re-lease the building, which counts Memorial Sloan Kettering, the United Nations and the Republic of Germany among its tenants.
Deep Discount On A High-Profile Tower
The sale price of about $270 million is roughly half of what the previous owner paid six years ago, according to Commercial Observer, a sign of how sharply values have reset in Midtown East. Newmark marketed One Dag, and a team led by Adam Spies and Adam Doneger brokered the deal, turning a once lofty valuation into a relative bargain.
Building, Tenants And The Playbook
One Dag, at 885 Second Avenue, has long been home to consulates and U.N. missions, a quiet power hub just off Turtle Bay. The building's brochure on CBRE notes more than $20 million in recent capital improvements. The Real Deal also highlights that banks are gradually returning to commercial real estate lending, and that JPMorgan's loan ranks among the largest office credits seen in this cycle.
What To Watch Next
Werner has been buying offices at steep discounts across Manhattan, a strategy that trade reporting says is aimed at capturing upside from leasing or potential conversions. His ability to secure bank financing for One Dag will be closely watched by other opportunistic buyers and lenders who are hoping the window is finally cracking open. Commercial Observer and other industry trade outlets say the coming months will reveal whether demand for high-quality Midtown space can rebound enough to make this reset pencil out.
