Pontegadea, the real estate investment arm of Spanish businessman and ZARA founder Amancio Ortega, is poised to buy a residential skyscraper in New York for US$500 million, according to market sources. US media reports confirmed by Pontegadea say that the company is engaged in advanced “negotiations” for what would be the first US residential building in Ortega’s real estate portfolio, which so far mostly consists of office and other types of buildings.
The property, at 19 Dutch Street in the heart of New York’s financial district is a 64-story tower with nearly 92,000 square feet (28,000 square meters) of living space and almost 500 apartments. The sale price under negotiation could amount to US$ 1 million per unit. Without revealing any details, Pontegadea sources confirmed ongoing negotiations that “could be completed in the next few weeks.”
Although it would represent Pontegadea’s first foray into the US residential market, the transaction aligns with the investment strategy demonstrated in previous acquisitions. Pontegadea focuses on what is known in real estate parlance as “trophy buildings” – high-quality, well-built properties in good locations that are considered relatively safe investments.
The 19 Dutch building is a 770-foot-tall (234 meters) skyscraper just three blocks from the city’s tallest building – One World Trade Center – where the Twin Towers once stood. The building is currently owned by real estate company Carmel Partners, and has all the typical amenities of a luxury residential building – concierge services, a gym, and a spectacular view of the Manhattan skyline from its rooftop Sky Lounge.
The building was completed in 2019 and according to its website, still has a few vacant apartments, although market sources indicate that it is 98% occupied. One vacant unit is a studio apartment on the 48th floor that rents for over US$4,600 per month. Another vacant one-bedroom, one-bathroom apartment on the 33rd floor rents for more than US$5,500 per month.
Buying a building in the US isn’t a big deal for Ortega, once considered the richest man in the world. He currently ranks 22nd on the Forbes list, with a fortune estimated at US$57.5 billion. His main source of wealth is the Inditex group, the textile giant he founded that includes brands such as ZARA, Bershka, and Massimo Dutti. Ortega reinvests much of his Inditex income in vehicles such as Pontegadea, which focuses on real estate but also has investments in other industries such as telecommunications.
All of Pontegadea assets (mostly located in the USA, Spain, and the UK) were valued at more than US$15 billion before the pandemic, which means that it owns more properties than the two largest Spanish real estate investment trusts – Merlin Properties and Colonial. Pontegadea’s most recent acquisition in April 2021 was an office building in Glasgow (Scotland) that it bought for US$237 million.