Acquiring a majority interest in 515 Madison was a joint venture of the Gural and Hemmerdinger families, which controlled the previously existing subordinate leaseholds at the 340,000-square-foot property. "Consolidating the ownership interests made sense to do now," says Woody Heller, executive managing director of Studley's capital transaction group, which represented the Malloy and Sheffer families in the sale of their majority interests.
In a release, Heller says the property had been occupied by two tenants, law firm Fragomen and architectural firm Brennan Beer Gorman, "which together leased over 100,000 square feet and typically leased whatever space became available." The result, he says, was that the building maintained "a low profile in the leasing community."
Both tenants outgrew the building in the past two years, "which resulted in the property having sufficient vacancy to warrant upgrading and repositioning," Heller says in the release. He adds, however, that the renovation "could not be justified given the short duration that remained on the existing leasehold. Therefore, it made sense to consider consolidating the ownership interests, which eventually led to the deal that just completed."
The completion of the majority-interest sale at 515 Madison follows on Monday's announcement by Massey Knakal Realty Services that it had brokered a 10-building multifamily sale in an all-cash deal of $29 million, the year's first significant Manhattan sales transaction. Known as the NYC Realty Corp. portfolio, the properties include 120-22, 124 and 126 W. 25th St.; 122 and 156 W. 20th St.; 464 W. 23rd St.; 191 W. 10th St.; 117 Varick St.; 116 E. 19th St.; and 141 E. 95th St.
Earlier this month, the Moinian Group refinanced three Downtown properties for a total of more than $550 million, while S.L. Green Realty Corp. lined up $325 million in fresh financing for its 1515 Broadway office property. And Macklowe Properties teamed up with the CIM Group to buy back a Midtown development site that once held the Drake Hotel.
Of the 515 Madison deal, Jeffrey Gural, senior partner in the JV, says in a release that his group recently completed a $5-million renovation of the entryway and lobby, while adding "above-standard pre-builts" to the mix for tenants. "We have leased almost 100,000 feet over the last 12 months and are now 96% occupied," he says. Gural adds that 515 Madison was the first building his father, the late Aaron Gural, ever operated "and it will also be the first of our buildings to receive LEED certification." Last June, the East Midtown Partnership cited the eco-friendly renovations at 515 Madison in naming the property Building of the Year.
The circa-1931 515 Madison was designed by J.E.R. Carpenter. It was nicknamed the DuMont Building for broadcaster Allen B. DuMont, who began the first television broadcasts on station WNYW in
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
