Madison Realty Buys East Midtown Building for $40.2M
By Lauren Elkies Schram August 8, 2014 11:44 am
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Madison Realty Capital has scooped up 891 First Avenue between 50th and 51st Streets for $40.2 million from Harry Field Realty, LLC, in a deal that also included 45,000 square feet of air rights, according to Joshua Zegen, a co-founder of Madison Realty Capital. The deal closed on July 17 and was recorded in city records today.
At the same time the firm closed on the building sale, Madison Realty Capital acquired a key, 2,900-square-foot corner retail space in the building, previously occupied by Desino restaurant. “They were in litigation with their former owner for non-payment,” Mr. Zegen said. “We struck a deal to buy them out.”
The building, which has an alternate address of 361 East 50th Street, was under-managed, Mr. Zegen said, and his firm will renovate the market-rate apartments with “substantial” money. The market-rate units make up about 50 percent of the 43 apartments. There are seven commercial spaces in the building, comprised of about 10,000 square feet. Other than the vacant restaurant space, which Madison Realty will rent out, the commercial spaces are occupied by mom-and-pop businesses. The retail spaces are renting at about half of market-rate rents, Mr. Zegen said, and the tenants have about three to five years left on their leases.
Ares Real Estate, a Chicago-based real estate investment trust, provided a $25 million mortgage in conjunction with the purchase, according to city records.
Aaron Jungreis, the president of Rosewood Realty Group, brokered the building sale.
As for the air rights, they “allow for additional development in the future,” Mr. Zegen said. “The deal wasn’t made on that but at the same time that’s additional upside.”
