The office building at 340 Madison Ave. is on the block, and thanks to its current cash flow it could be one of the few prime city offerings to fetch more than the sellers paid for it in the boom.
The 23-story tower has about 750,000 square feet and was redeveloped in 2003 by the Macklowe Organization using architects Gensler and Moed de Armas & Shannon.
According to newsletter Real Estate Finance & Investment, current owners Broadway Partners tapped Darcy Stacom and colleague Bill Shanahan, both of CB Richard Ellis.
“What we understand people want these days is cash flow and this building has real cash flow,” Stacom told us. The cash flow is higher than when Broadway paid $550 million for it in 2006, and she expects the buyer to get about a 6 percent return.
Among the building’s tenants is law firm McDermot Will & Emery, as well as the US Comptroller of the Currency, PNC Bank and a Coach store. One small part of the land at 340 Madison is owned by a church, which gets a small ground rent.
Macklowe and Caisse de depot et placement du Quebec sold the property to Broadway for $550 million, or more than $780 a square foot, in late 2006, providing a piece of the war chest for the Macklowes’ disastrous, $7 billion purchase of some of Equity Office Properties’ New York assets.
Records show Broadway has a $400 million mortgage with ING Real Estate Finance.
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Sometimes you can rebuild it and they will come.
Taconic Investment Partners and Brian Ray‘s ABR Partners bought an old garage building at 429 E. 75th St. for $7.8 million in 2006 and completely redeveloped it into a modern, six-story medical facility ready to be leased or sold off as condos.
The hard work paid off, as the nearby Hospital for Special Surgery just paid $24.35 million cash for the building.
According to Taconic partner Charles Bendit, the developers dug out the basement to make it usable, and added floors and elevators to the structure, which they pumped up with electricity, plumbing and heating and ventilating capacity.
Paul Wexler of Corcoran Wexler was marketing broker for the sellers.
However, sometimes you want to rebuild it and they won’t come.
Downtown, Bendit said they are in discussions with their lender on 375 Pearl St., the tall, white former Verizon building by One Police Plaza that Taconic hoped to reskin and attract Class A ten ants.
“There are a number of differ ent ways to go and we are work ing together to come up with a solution that works for every body,” Bendit said. “It’s a unique building and someone hopefully will benefit from the downturn in the market and make themselves a good deal.”
Unfortunately, he said, “We haven’t been getting the level of interest we had hoped for.”
