The International Toy Center

With the future uncertain for the toy industry and the demand for investment property at unprecedented levels, 200 Fifth and the neighboring 1107 Broadway were sold on April 4, closing the books on another Wien & Malkin success. The $355 million price is extremely favorable for the selling partnership, representing $350 million more than the total original equity investment in both buildings.

Late last fall, the two properties — situated at the convergence of Fifth Avenue and Broadway at Madison Square Park — were placed on the market, and immediately attracted intense interest from a wide variety of investors. With negotiations proceeding through the Christmas holidays, an agreement on terms was reached during an international conference call on December 30, and the contract was signed and an irrevocable $30 million deposit received on January 2, 2005.

"We are gratified to have led our investors in the International Toy Center for more than 50 years, and to have produced such a fantastic result," says Peter L. Malkin, Chairman of Wien & Malkin.

"This investment spans three generations. My late father-in-law, Lawrence Wien, formed this partnership before I even entered college. I worked with him on the subsequent acquisition of 1107 Broadway and in running the buildings for more than 40 years, and my son has led the operations process for almost a decade and ran the sale process," says Peter Malkin. "This is not just an investment success, but an obvious highlight of Wien & Malkin's successful transition from one generation to the next, creating, preserving, and realizing value for our investors."

Lobby at 200 Fifth Avenue

Anthony Malkin, President of Wien & Malkin Supervisory Services, says the decision to sell the ITC buildings "reflects our perception that this was the logical time to seek an exit from an investment that had run a successful course."

"Today, the market deems that the ITC provides a better opportunity to a new owner who has placed a significant premium on the conversion of the property to residential condominiums, rather than to continue to run the buildings as showrooms for the faltering toy industry."

He adds: "In the time since we replaced Helmsley-Spear as managing agent, we addressed meaningful physical and operational issues, performed a comprehensive review of its potential, and became intimately familiar with the strengths and weaknesses of the industry it has served since inception. We determined there were investors in the marketplace who would value the property more highly on a risk adjusted basis than we thought ongoing operations justified, and determined it was in the best interest of our investors to exit the investment."

The ITC is in the heart of the Flatiron District, with 200 Fifth Avenue situated directly across from the iconic Flatiron Building.

"Demand is rising in the Flatiron District for residential, hotel, retail and office space, and the modernized ITC buildings, with their substantial and very flexible floor plates, can accommodate any of those uses," notes Anthony Malkin. "This sort of adaptive reuse, while promising, involves investing hundreds of millions of dollars and a level of risk not in keeping with the investment objectives of Wien & Malkin-led ownership."

Onward and upward.

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