David Werner continues his epic New York buying spree.
The investor is in contract to buy the office building at 5 Hanover Square in the Financial District from CIM Group, sources told The Real Deal. The contract price is somewhere between $50 million and $60 million.
That’s about half the $104 million Los Angeles-based CIM paid for the 1960s-era office building more than a decade ago.
Werner has spent the last few years buying up older office buildings in the Financial District and Midtown at deep discounts, many of which he’s converting into apartments. The 25-story, roughly 340,000-square-foot 5 Hanover is about 50 percent vacant and would most likely be a partial conversion.
Representatives for Werner and CIM Group did not immediately respond to requests for comment. A CBRE team led by Doug Middleton and Jack Stillwagon brokered the deal. The brokers declined to comment.
CIM — led by founders Shaul Kuba, Richard Ressler and Avi Shemesh — bought 5 Hanover in 2013 from Christopher Schlank and Nicholas Bienstock’s Savanna, which had picked up the building three years earlier when previous owner Kent Swig surrendered the property after defaulting on his mortgage. The company replaced the building’s windows, updated the lobby and put in new elevator cabs. In 2022, it signed the independent IDEAL School of Manhattan to 63,000 square feet.
The Financial District office market, however, has struggled — particularly since the pandemic. The Downtown availability rate is north of 20% as of the first quarter, according to CBRE.
It seems not a week goes by without Werner making news. Earlier this week, he and partner Nathan Berman of Metro Loft Management secured a $90 million loan from Ran Eliasaf’s Northwind Group for their residential conversion of the office building at 675 Third Avenue.
Werner and Berman recently purchased the building from the Durst Organization for more than $100 million.
Werner is also flipping the office portion of the nearby 300 East 42nd Street, which he went into contract to buy earlier this year for $52 million.
The notoriously press-shy investor is known for being active when values are low and bargains are to be had. He was one of the biggest buyers in 2014 and once again started snapping up discounted office buildings in 2022.
His deals include 100 Wall Street, which he bought last year with Lloyd Goldman’s BLDG for $115 million (a deep discount to the $270 million the seller Barings paid in 2015) and 40 Fulton Street, which he bought in 2022 for $101 million. Seller Vornado Realty Trust had been eyeing 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 and Berman also have plans to convert the former Pfizer headquarters in Midtown into 1,600 apartments, which would make it the largest office-to-resi conversion ever.