The Real Deal

Michael Shvo, Bilgili pick up Coca-Cola Building for $937M

David Jeans, Oct 08, 2019

Sellers Nightingale and Wafra had purchased 711 Fifth Avenue in recent months

Michael Shvo and his frequent Turkish business partner Serdar Bilgili are buying the Coca-Cola building for $937 million — the second time the property has traded hands in recent months.

Developers SHVO and Bilgili Group purchased a majority stake in the 354,000-square-foot building at 711 Fifth Avenue, buying the interest of Wafra Capital Partners, according to people familiar with the matter. They were backed by Deutsche Finance and German pension fund BVK. The transaction includes $400 million equity, sources said.

The ownership of the 11-story building, which had been owned by the Coca Cola company since 1983, has been the subject of bewilderment in recent months. The food-and-beverage conglomerate began marketing the building in December, before it went a deal with Nightingale Properties, Ashkenazy Acquisitions and Wafra, a subsidiary of a Kuwaiti sovereign wealth fund, went into contract in May for $907 million.

Those partners beat out other bidders, including Aby Rosen’s RFR and L+L Holdings, who offered below $900 million, and SHVO and partners, who offered a $955 million sum.

To fund the acquisition, Nightingale and its partners reportedly secured a 90 percent debt package from french bank Natixis. But in July the lender walked from the deal, and Nightingale subsequently sued Coca-Cola for breach of contract, claiming that the landlord had not disclosed a letter that involved information about retail tenant Swatch Group.

As the deal appeared to fall apart, JPMorgan swooped in and provided a nearly $700 million loan. The acquisition closed in August, according to property records.

This week’s acquisition of the building by SHVO and his partners is the second transfer of the building in a month, and represents a $50 million profit for Nightingale and its partners.

Nightingale will remain property manager of the building, a source said. The building’s tenants include investment bank Allen & Company, whose chairman, Herbert Allen sits on the board of Coca-Cola.

Shvo and partners declined to comment. Wafra and Nightingale could not immediately be reached for comment.

The building is Shvo’s first commercial property. It is one of half a dozen properties he and his partners have acquired in the past year, including 9200 Wilshire Boulevard in Beverly Hills; the Raleigh Hotel, South Seas hotel, and The Richmond Hotel in Miami Beach; and 685 Fifth Avenue in Manhattan.

Correction: The article has been updated to reflect that the transaction valued the building at $937 million, not $955 million as previously reported. It has also been updated to clarify that it was Wafra’s interest in the property that was purchased, and that $400 million equity is in the deal, not $500 million.