NEW YORK CITY — ING Capital LLC, part of Dutch global financial institution ING Group (NYSE: ING), has originated a $570 million bridge loan for the acquisition a 37-story skyscraper located at 550 Madison Ave. in Manhattan. ING Capital provided the financing to Olayan America, the U.S. investment arm of The Olayan Group, an international real estate investor based in Saudi Arabia.
Olayan America will purchase the office tower, also known as the Sony Building, from The Chetrit Group for $1.3 billion, according to The Real Deal. Ron Cohen of JLL represented Olayan America in the transaction, and Doug Harmon of Eastdil Secured represented The Chetrit Group.
Located within the Plaza District of Manhattan, the tower features 852,830 square feet of rentable mixed-use space, including approximately 776,000 square feet of office space, retail frontage on Madison Avenue, and exhibition and museum space. One restaurant tenant currently occupies 5,000 square feet at the tower, which is nearly 100 percent vacant, according to ING Capital.
“The property has been maintained to a high standard and has never previously been available to the open market for office leasing,” says Tony Fusco, head of real estate at Olayan America. According to The Real Deal, the seller had previously planned to convert the upper floors of the skyscraper to residential condominiums.
Completed in 1984, 550 Madison Ave. was previously the global headquarters of AT&T (NYSE: T) and later the U.S. headquarters of Sony Corp. (NYSE: SNE). Sony Corp. sold the office tower in 2013 for $1.1 billion.
Olayan and asset manager Chelsfield plan to rebrand the building and renovate and reconfigure the existing space.
“The Sony Building is a New York City landmark,” says Craig Bender, managing director of ING Capital. “Our long-term real estate investment outlook is strong, and we look forward to seeing how Olayan and Chelsfield reposition this property in the future.”
ING Group’s stock price closed on Wednesday, June 1 at $12.38 per share, down from $16.55 per share one year ago.
— John Nelson