Columbia Property Trust recently revealed plans to expand its presence on the New York City commercial real estate market. The Atlanta-based REIT has reached an agreement to acquire 149 Madison Ave., a 127,000-square-foot office asset in Manhattan, from family-run investment firm and landlord Abramson Brothers. The transaction is scheduled to close later this year. Though financial terms of the sale have not been disclosed, TheRealDeal reports the building might fetch close to $88 million.
Located right in the heart of Midtown South’s NoMAD district, on the southeast corner of 32nd Street and Madison Avenue, the asset known as the Steel Building was completed in 1917. The 12-story high-rise is subject to a ground lease that expires in January 2018, with fully concurrent leases. Columbia will then own a fee simple interest in both the land and the building, with plans to invest in comprehensive interior and exterior renovation efforts at the site. According to Adam Popper, senior vice president for Columbia in the Eastern region, the company has already begun preparations to reposition the asset over the next 18 to 24 months.
“149 Madison offers a compelling opportunity to leverage our scale and expertise in New York at an attractive discount to replacement cost and to create value through repositioning and re-leasing the full building,” Nelson Mills, president & CEO of Columbia Property Trust, said in a statement. “With over $600 million in proceeds available from our recently completed disposition program, the purchase of 149 Madison is a promising start to our plan to put capital to work in our target markets.”
Upon completion of the project, 149 Madison Ave. will become Columbia’s second Midtown South asset, bringing the company’s New York City-area portfolio to 2 million rentable square feet.
Eastdil Secured and Cushman & Wakefield represented Ambramson Brothers in the transaction. According to TheRealDeal, Ambramson owns the leasehold, while members of the prominent Schwalbe family own the fee interest.
Images courtesy of Yardi Matrix