It’s actually an overpay by more than 2x if the intention was to redevelop it as a class A office building.

Assuming its fully redeveloped and gets top of the market rents (which it won’t since the floor plates are inefficient and the ceilings are too low) of ~$100/RSF, it should have ~$70/RSF in net operating income which at a 5% cap rate is $1,400/sf exit value. Going in at $750/sf with $400/sf in redevelopment costs plus $100/sf in financing and operating shortfalls leaves you at a ~$1,250/sf total cost basis, 40% of which is equity for a total of $500/sf, which means your $150/sf entrepreneurial profit is a 0.3x multiple on invested equity. A deal of this level of risk would typically command a minimum of a 2.0x multiple, and that’s not even factoring the amount of time it would take to go through the redevelopment process and try to lease the full building up when the office market is in the shitter. It’s actually hilarious that so many people on here seem to think that this was a “good deal” when the buildings current owner and profiling Nyc landlord Jeff gural himself said that it was probably not worth more than $80 million. Jacob Garlick probably realized this sometime after having his day in the paper as he forgot to send in the court mandated 10% deposit by the deadline last Friday.