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NEW YORK CITY-With the deed to 292 Madison Ave. in hand, Tao-Maofim LLC has teamed with Carlton Advisory Services to fund the acquisition. The $130-million loan arranged by Carlton covers 93% of the $140-milllion purchase price.
Tao-Maofim, a joint venture of Tao Tsout Ltd., Financial Levers, Metropolitan Real Estate Investments and the Marciano Investment Group, closed the deal with seller SL Green late last month. According to an SEC filing, SL Green Realty Corp. realized a gain of approximately $99 million on the sale of the 187,000-sf office property.
On behalf of the new owners, Carlton arranged the sale of the property's fee simple interest to SL Green for $70 million and arranged a 10-year, fixed-rate leasehold mortgage for $60 million. The combined pay rate for the financing is 4.92% and Carlton also structured a 70-year sale-leaseback and ground lease with a buy-back provision on the fee simple interest.
292 Madison is 100% occupied; however, 60% of the property's net rental area is set to expire over the next six years. "With average current rents approximately 41% below the market, this acquisition offers incredible upside through re-leasing at market rents, almost doubling the net operating income by 2013," Carlton executives said in a release. Carlton chairman Howard L. Michaels joined with senior executive Michael J. Campbell, partner, on the transaction team for the financing.
Tao-Maofim also made headlines last month with the acquisition of the Lipstick Building at 885 Third Ave. The joint venture paid Tishman Speyer Properties $648.5 million for the 586,589-sf property. At that time, the JV was said to be in the process of acquiring 292 Madison, as GlobeSt.com previously reported. Carlton, on behalf of Haim Revah's Metropolitan Real Estate Investors, also arranged the sale of Lipstick building's fee simple interest to SL Green for $317 million.
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