It took five years and a significant pricing reduction, but Madison Capital and Lubert-Adler finally dumped the leasehold interest at 71 Fifth Avenue.
Namdar Realty Group bought the leasehold at the Class B office building for $62 million, the Commercial Observer reported. The deal was finalized last week, according to Traded, which first reported the transaction.
The 11-story property straddles the Flatiron and Union Square submarkets. Igal Namdar has approximately 90 years left on the lease; the landowners are Samco Properties and the family of Mark Lapidus, who was the global real estate chief of WeWork.
A Meridian Capital Group team including Helen Hwang, David Schechtman and Brian Szczapa arranged the deal.
In 2016, Madison Capital agreed to pay nearly $85 million upfront and $3.5 million in annual rent after signing a hard contract to acquire the fee position. When Madison and Lubert-Adler began marketing it in 2021, sources told the Observer that the property could fetch as much as $150 million.
Instead, the joint venture didn’t even land half of that original aspiration. None of the parties involved in the deal responded to the Observer’s request for comment.
Tenants at the property include WeWork, Dutch payment company Adyen, artificial intelligence startup Captions and an unnamed AI company that made its deal off-market. There’s a full floor available spanning more than 15,000 square feet. Additionally, City National Bank occupies part of the ground-floor retail space, which is otherwise vacant.
Earlier this year, Igal Namdar’s company agreed to buy the 540,000-square-foot office building at 250 West 57th Street from Empire State Realty Trust for approximately $280 million.
The purchase price is significantly lower than the $350 million ESRT had been asking for the property earlier this year.
The 26-story building is 84 percent leased; T.J. Maxx anchors the retail portion under a lease extending through 2041.
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Madison Capital, Lubert-Adler selling 71 Fifth Avenue
Madison Capital in contract to buy ground lease at 71 Fifth Ave.
Igal Namdar buying ESRT’s 250 West 57th Street for $280M
