NEW YORK CITY–Ashkenazy Acquisition Corp. has purchased the ground lease at 625 Madison Ave., in the Plaza District, for $400 million. The office and retail building leasehold at 625 Madison is owned and operated by SL Green Realty Corp.
Cushman & Wakefield EVPs Brian Corcoran, Helen Hwang, Frank Liantonio and Nat Rockett; Steve Kohn, president; Marc Nakleh, senior director; Karen Wiedenmann, executive director and Sujohn Sarkar, director, represented the seller, 625 Ground Lessor LLC. The deal was done directly with Ashkenazy, Cushman reports.
The pricing, according to Cushman, represents a going-in yield of 1.15% based on contractual ground lease payments through June 2022—reflecting historically low interest rates, escalating land values due to the strength of the residential and retail market and the scarcity of ground lease offerings. The ground lease expires in June 2054.
625 Madison Ave. spans the full block-front on the East Side of Madison Avenue between 58th and 59th streets. The underlying ground is improved with a 17-story, 563,000 square foot Class A office and retail tower. Fashion giant Polo Ralph Lauren occupies 70% of the building.
?“The investment benefits from strong sponsorship, long-term upside and a truly irreplaceable location at the core of one of the most luxurious commercial, residential and retail corridors in the world,” says Hwang.
“A ground lessor's position in the Plaza District, New York's epicenter, represents one of the safest options among all asset classes today,” adds Corcoran.
Notes Kohn, “Leased fee/ground lessor positions are rarely offered in Manhattan so the opportunity was of great interest to investors around the world.”
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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.
