Summit Properties, which owns 2.66 million square feet of apartments in 90 New York City buildings, took an opportunistic — and surprising — first plunge into the sizzling Manhattan office market, Realty Check has learned.
Summit bought the leasehold of 444 Madison Ave., an Art Deco-style, 42-story tower between East 49th and 50th streets, sources said. The price was $41.7 million, according to public records.
The news came as something of a surprise. It was widely reported last month that a different New York developer and landlord, Savanna, was the buyer of 444 Madison or that it was partners with Summit in the purchase.
In fact, said an insider, the two highly respected firms “were originally going to buy it together but ended up with Summit alone as the owner.” The seller was Westbrook Partners which defaulted on a $120 million mortgage.
Zohar Levy, Summit’s chairman and main shareholder, said, “We intend to invest and turn the iconic tower into a top-tier building for premier tenants who value location, prestige and quality.”
Summit paid less for 444 Madison than the $50 million that was inaccurately reported last month. There’s no debt on the building. Sources said Summit studied the office market for a long time and decided the time was right, now that fears of work-from-home are largely over and tenants are expanding at a rapid pace.
Summit immediately tapped Savanna, with whom it enjoys a cordial relationship, to be the property’s asset manager and JLL as its exclusive office-leasing agent.
The 500,000 square-foot building has a 135,000 square-foot contiguous block of space available, a rare and valuable commodity in the drum-tight Manhattan market.
A tenant could also exploit an even rarer option for prominent rooftop signage, as Burberry, New York magazine and Newsweek each had in the past.
Mitch Konsker, head of the JLL leasing team with Ben Bass, said the building’s largest tenant is law firm Schwartz, Sladkus, Reich, Greenberg. Other tenants include the Doris Duke Foundation, EOS Hospitality and Capital Dynamics.
Office asking rents are expected to be in the $80-100 per square foot range. The tower also has about 5,300 square feet of retail available.
In addition to Summit’s residential holdings, it also owns a $700 million retail mall portfolio across the US and stakes in two Manhattan hotels.
Summit’s prize stands in the heart of resurgent Madison Avenue north of Grand Central Terminal. It’s close by the new JPMorgan Chase headquarters tower; to Munich Re’s 330 Madison where Guggenheim recently expanded; and BXP’s development site at 343 Madison where excavation is under way for a new tower.
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