545 Madison Avenue Rehab Gets $60M Construction Loan

LCOR has received a $60.7 million construction loan from KeyBank for the developer’s gut rehab of the 17-story, 140,000-square-foot office bulding at 545 Madison Avenue in Manhattan. The loan package also includes an $11 million letter of credit that secures LCOR’s ground lease during construction. The building is aimed at “elite, boutique financial services companies and law firms,” according to a prepared statement, with offerings as full floors or multiple floors. Floor plates range from 6,200 to 9,300 square feet. In late 2006, LCOR signed a 75-year ground lease on the property, which had been built in 1955. Work on the rehab, which began in May 2007, includes replacing the previous façade with a floor-to-ceiling glass curtain wall and installing new mechanical and electrical systems and elevators. Construction is scheduled for completion this summer, and after rehab, 545 Madison Avenue is expected to earn a LEED Gold rating. LCOR’s joint venture partner is BlackRock Inc. An LCOR spokesperson told CPN today that Jones Lang LaSalle will handle office leasing, and CB Richard Ellis Inc. will be the leasing broker for the nearly 7,000 square feet of ground-level and basement retail space. A Cushman & Wakefield spokesperson said that company’s latest figures, from the end of fourth quarter 2007, show 126 office buildngs, 83 of them Class A, in the submarket bounded by 47th and 59th streets and Madison and Fifth avenues. The average Class A vacancy in that submarket, according to Cushman, is 7 percent and the average asking rent for Class A space is $105.06. Matt Astrachan, executive vice president with Cushman & Wakefield’s Manhattan office, told CPN that this building falls in a short stretch of Madison Avenue, from about 520 to about 590, that’s a “hodgepodge” of newer Class A and 1960s-vintage Class B buildings. With much of this prime real estate underutilized, the rehab at 545 Madison Avenue is “a smart move,” he said. “This was a B building in an A location.”