Brookfield Closing In on Equity Investment in 63 Madison Avenue

Brookfield is on the cusp of a preferred equity investment in 63 Madison Avenue, a 15-story office building in Midtown.

The 860,000-square-foot building is owned through a joint venture with George Comfort & Sons, Jamestown and Loeb Partners Realty.

The Real Deal reported that Brookfield is acquiring a 49 percent stake valued at $400 million. But one source familiar with the transaction told Commercial Observer that Brookfield’s investment comes in the form of preferred equity, and acts as a recapitalization rather than an outright sale of a minority interest in the property. Brookfield will not become a limited partner through its investment, the source said.

Newmark’s Adam Spies and Adam Doneger negotiated the deal, according to TRD. Newmark, Brookfield and George Comfort declined to comment. Jamestown and Loeb Partners did not immediately respond to requests for comment.

The building, which is 76 percent leased, was put up for sale in January, TRD reported at the time. The owners hope to draw in new investors who could help fill the building’s empty spaces, according to TRD. 

The building saw one of 2024’s largest lease deals with American Eagle Outfitters taking 338,085 square feet, which combined the relocation of its headquarters with a sublease with news organization CBS. In addition to CBS and American Eagle Outfitters, 63 Madison Avenue is also home to insurance company New York Life.

Brookfield isn’t the only one making moves along Madison Avenue. Scott Rechler’s RXR made a similar deal on the same block back in May to acquire the 41-story office tower at 590 Madison Avenue from the State Teachers Retirement System of Ohio for almost $1.1 billion. 

Not to be left out, Tishman Speyer recently acquired its first Manhattan office building in years at 148 Lafayette Street in SoHo, a 12-minute subway ride from Madison Avenue, for $105.5 million, CO reported at the time. Blackstone Real Estate Debt Strategies provided a $68.3 million acquisition loan for Tishman’s purchase. 

Blackstone itself picked up a nearly 50 percent stake in 1345 Avenue of the Americas, its first office purchase in three years.

Amanda Schiavo can be reached at aschiavo@commercialobserver.com.