It’s a sign of the times: Japanese firm Hiro North American Properties’ sale of the office tower at 650 Madison Avenue has closed, and, at $680 million, it’s the biggest building sale of 2008 so far (and the only over $400 million). Wasn’t too long ago—10 months, give or take—that $680 million for a Midtown building was ho-hum.
Not anymore. In the fourth month of 2008, $680 million is the new $1 billion. It’s a deal to be picked apart. So let’s do so.
Real estate pros originally predicted the 452,343-square-foot building would command a sales price of between $750 and $800 million, according to reporting this past winter by my colleague Eliot Brown. Its distinct shiny green glass-curtain wall and its location smack-dab in the Plaza District of Midtown (one block north of Harry Macklowe’s GM Building on Fifth) made the 27-story tower appealing to potential buyers.
Also, as the Post notes today, it’s got serious retail and a brand-name office tenant, which presumably gets sweeping views of Central Park: Crate & Barrel and leather goods seller Tod’s are the biggest retailers in the building; Polo Ralph Lauren is the biggest office tenant.
Finally, 650 Madison went for a very respectable $1,133 a foot—not a record, of course, but a decent and buoying sign for midtown office properties as investments.
Still, one more thing: The buyers, the Carlyle Group and Ashkenazy Acquisitions, put together what the Post is calling “a syndicate of lenders,” including a French bank and an American one, to finance the deal.
That’s a lot of leverage. Sound familiar?
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