NEW YORK CITY-Seeing appeal both in its current and possible future incarnations, a joint venture between Oxford Properties, Vornado Realty Trust, Crown Acquisitions and Highgate Holdings—together with institutional investors advised by J.P. Morgan Asset Management—has acquired 650 Madison Ave. for $1.3 billion. The Carlyle Group was the seller. Eastdil Secured's senor managing directors Adam Spies and Douglas Harmon acted as exclusive broker in this transaction.
The 27-story, 594,000 square foot Class A office tower, located on the full western block front of Madison Avenue between 59th and 60th streets. The property contains 523,000 square feet of office space and 71,000 square feet of retail space. The office space is the world headquarters for Polo Ralph Lauren, which occupies 274,000 square feet. The retail space is primarily leased to Crate & Barrel for its 61,400-square-foot flagship Manhattan store, and to Tod's, a shoe and leather goods specialty store spanning 7,900 square feet.
The building likely generated interest from four leading commercial real estate firms because not only is it a trophy asset in its current configuration, it has great potential for other uses, Oxford senior managing director Andrew Trickett tells GlobeSt.com.
“It's a unique asset with unique optionality,” he says. “As an existing asset it features world class retail and a Class A office building. Long-term, there's a residential optionality because of our park views and our as of right ability to build. It's a great residential location.”
It would be premature to say just how high the building could go, Trickett notes, and he was uncertain of just how far into the future such a long-term plan might be put into place. He declined to say just how much of the building Oxford now owns.
The companies also all came on board because of a shared history, he says. “We have a co-investment with Crown at Olympic Tower, which we acquired last year, and many of the companies have looked at doing deals together, so there are a lot of relationships between people from the different firms.”
Vornado, which owns a “co-controlling interest” of 20.1%, declined to comment. Crown, Highgate and Carlyle did not respond to requests for comment by press time. Vornado and Oxford will co-manage and co-lease the office space at the property. Vornado and Crown will co-manage and co-lease the retail space at the property. The purchase is being financed with a new $800 million seven-year 4.39% interest-only loan.
No information on brokers representing the various sides of the deal was available at press time. Watch this space for possible updates.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
