Verizon Building is sold for $500m.

Verizon is "evaluating bids" for its 1095 Avenue of the Americas HQ and is expected to announce Equity Office Properties has won with 'a bold $500 million offer.

The price tag was driven up by feverish late-round competition from Trizec Properties, Reckson Associates Realty Corp. and

Verizon plans to retain some space in the building in the form of switching stations and has previously stated it will continue to own a portion of 1095 Ave. of the Americas.

However, the building will likely come online at a time when the large contiguous blocks of Class A midtown space that it possesses are few and far between.

"The space comes online Q107 and they can get started right away on their efforts to lease the building," said David Goldstein, executive managing director at Studley.

"So they've got a little buffer and the timing for the delivery of what should be around 1 million square feet is pretty good."

EOP has declined to comment on reports of the purchase, however, in recent months the Chicago-based REIT has made no secret of the fact that it is planning a Manhattan spending spree.

The REIT already owns 1301 Avenue of the Americas, 527 Madison Ave., 850 Third, Park Avenue Tower, Tower 56, World Wide Plaza and 717 Fifth Avenue.

Just last month, Frank Frankini, senior vice president of engineering, speaking to REW about the Trust's plans to implement its highly successful energy management program at two of its current New York properties, said EOP was expanding its presence here.

The Trust is spending nearly $10 million installing co-generation plants at 717 Fifth and 1301 Ave. of the Americas.

It is estimated that the Verizon building may need $200 million to lease it up and build out its space to attract premium rents but, if anyone can squeeze top returns out of the asset, it's EOP, according to Goldstein.

He said, "The Verizon property is a heavy lift in that you are dealing with a great deal of vacancy, so it becomes a more speculative investment. Equity is a top tier developer and they have been looking to expand their presence in Manhattan. This has been the premier Class A midtown acquisition target that delivers a great deal of vacancy to the market when the market can really use the space."

David Levy, principal of Adams and Co. which owns the building next door, 1071 Ave. of the Americas, agreed.

"It's 100 percent location," he said. "It's right in the heart of the transit triangle with the best commuter transportation in the world. Look at how close it is to the corporate corridor--you can't beat it. And where are the other big blocks [of space] in midtown? I'm sure the purchaser took that into account."

Finding a new tenant won't be an issue, according to Levy. "When they are done with 1095, it will be practically a brand new building."

Verizon declined to confirm the sale of 1095 Ave. of the Americas, beyond stating, "We are evaluating bids, but don't have a signed contract." The telecom giant was repped by CB Richard Ellis' Robert Alexander, Robert Stillman, Darcy Stacom and William Shanahan, who also declined comment.