Installment Sale On the Table for $1.1B 590 Madison Avenue Deal

The much-anticipated sale of 590 Madison Avenue — touted as the biggest office trade since 2022 — could be structured as an installment sale, sources familiar with the process told Commercial Observer. 

At least one bidder is requesting that the seller, State Teachers Retirement System of Ohio (STRS Ohio), structures its $1.1 billion asking price for the 41-story office tower as a deferred payment sale in which the buyer could pay in installments to meet the heavy $1 billion-plus price tag, sources said.

Sources said that ownership is now weighing 100 percent purchase options in addition to selling the tower — previously known as the IBM Building — in installments, with a decision being imminent. 

Bids for the 1 million-square-foot office building were due May 2, with one source indicating it was a two-horse race between RXR and Tishman Speyer. Another source, however, told CO that more than two bidders remain in play. 

Blackstone was considered the betting favorite last week to purchase the Midtown office asset against bidders SL Green Realty, Tishman Speyer, RXR and RFR, The Real Deal previously reported. 

One bidder in particular, who could not be identified, is said to be pushing for an installment sale structure. 

Eastdil Secured’s Gary Phillips, Will Silverman and Roy March are marketing the sale. Phillips declined to comment. 

Tishman Speyer, RXR, RFR, Blackstone and STRS Ohio also declined to comment. SL Green did not return a request for comment. 

With increased volatility and uncertainty in the market, some sources said 590 Madison’s $1.1 billion price is too big a pill for prospective buyers to swallow or secure financing for. The debt and equity requirements for a smaller initial payment, coupled with deferred future payments, is a gentler request. One source noted that STRS Ohio is a seller with patient capital and no real need to hurry on collecting its asking price.

Lending conditions tightened significantly on the heels of President Donald Trump’s April 2 Liberation Day tariff announcement, which sent jitters through the industry and slowed a commercial mortgage-backed securities market that had just begun to get active with behemoth office deals. 

STRS Ohio put 590 Madison on the market in February. The roughly $1.1 billion asking price is one of the biggest for the office sector since the onset of COVID-19, CO previously reported. 

In April, STRS Ohio inked a lease with Apollo Global Management for 100,000 square feet in the building. Other tenants include luxury retail company LVMH, private equity firm Reverence Capital Partners, financial services firm E.F. Hutton and private equity firm Crestview Partners.

Andrew Coen can be reached at acoen@commercialobserver.com.