NEW YORK CITY — A joint venture, in conjunction with institutional investors advised by J.P. Morgan Asset Management, has acquired 650 Madison Avenue, a 27-story, 594,000 square foot Class A office tower located on the full western blockfront of Madison Avenue between 59th and 60th streets in New York City. The purchase price for the property is approximately $1.3 billion, which was financed with a new $800 million, 4.4 percent interest-only loan with a seven-year term.
The joint venture is led by Oxford Properties, Vornado Realty Trust (NYSE:VNO), Crown Acquisitions and Highgate Holdings.
650 Madison Avenue 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 flagship Manhattan store (61,400 square feet) and to Tod’s, a shoe and leather goods specialty store (7,900 square feet).
The greater New York City office market had nearly $8 billion in deals either under contract or which closed in the second quarter, according to Jones Lang LaSalle. A new record was established in the second quarter with the average Class A office sale price of $1,055 per square foot. The sale price for 650 Madison Avenue equated to approximately $2,180 per square foot.
Vornado Realty Trust has a co-controlling 20.1 percent interest in the joint venture. Vornado and Oxford will co-manage and co-lease the office space at 650 Madison Avenue. Vornado and Crown will co-manage and co-lease the retail space at the property.
Vornado Realty Trust is an equity REIT with more than 100 million square feet of commercial real estate in its portfolio. The New York City-based REIT’s real estate holdings are concentrated in the New York City and Washington, D.C., markets.
Vornado Realty Trust’s stock price closed Tuesday at $84.72 per share, up from $80.71 per share this time last year.
— John Nelson