The Carlyle Group has agreed to sell the 27-story office and retail tower at 650 Madison Avenue to Crown Acquisitions and Highgate for $1.3 billion.
“We are delighted to reach this agreement with Crown and Highgate, two of the smartest real estate owners around, on the sale of 650 Madison Avenue,” said Robert Stuckey, Carlyle managing director and head of U.S. real estate, in a prepared statement. “This is a great outcome for our investors and validates our opportunistic approach.
The purchase of the 600,000-square-foot building is the largest in the U.S. since Google‘s acquisition of 111 Eighth Avenue from Taconic Investment Partners in 2010. According to a Bloomberg report, on a square-foot basis the acquisition exceeds the record $1,583 paid for 450 Park Avenue in 2007.
“650 Madison Avenue is one of the finest properties in all of Manhattan, a trophy in every sense,” added Stanley Chera, founding principal of Crown Acquisitions, in the statement. “The unmatched location–outstanding for office and retail use–and the superior quality of the asset solidify its position as a trophy destination for generations to come.” Crown Acquisitions had been one of the final bidders for the tower, The Mortgage Observer reported in a June 2013 profile.
The property, located between 59th and 60th Streets includes a 425,000-square-foot office tower, a 100,000-square-foot medical office space and 75,000 square feet of retail space. The building is currently 92 percent leased and tenants include Polo Ralph Lauren, which leases over 275,000 square feet of space, and Crate & Barrel.
Carlyle Realty Partners V, a $3 billion opportunistic U.S. real estate fund, acquired in the property in 2008 and since that time completed over 400,000 square feet of leasing.
“We had a strong conviction in the underlying value of this property when we acquired it during the Great Recession, and we are pleased to capitalize on the success of our active repositioning and leasing plan,” added Andrew Chung, managing director at Carlyle, in the statement.
Adam Spies and Douglas Harmon of Easdil Secured acted as exclusive broker in this transaction.