DivcoWest Buys NYC Trophy Building for $310M
- Jul 09, 2019
Ownership of the approximately 283,700-square-foot trophy office tower at 540 Madison Ave. in Midtown Manhattan has changed hands, as originally reported in an article by The Real Deal. DivcoWest Real Estate Investments purchased the 39-story building from Boston Properties in a transaction valued at $310 million.
Originally developed by Diesel Construction in 1970 and comprehensively renovated in 1999, 540 Madison last traded in 2008, when Boston Properties acquired the asset for just over $277 million in a joint venture with Qatar Investment Authority and Kuwait Investment Authority, as part of a $4 billion, three-property portfolio purchase from Macklowe Properties. Boston Properties had maintained a 60 percent ownership in 540 Madison prior to the sale. The Kahn & Jacobs Architects-designed property, which also features 8,000 square feet of retail space, is currently home to more than 30 tenants, including a bevy of financial sector businesses; CIM Group, OFS Capital and Park Square Capital are among the names on the tenant roster. According to the Real Deal, the property is currently 89 percent leased. CBRE marketed the asset on behalf of the seller.
Buying and selling in NYC
New York remains one of the most coveted office investment-sales arenas in the world. With the acquisition of 540 Madison, DivcoWest, which typically focuses its acquisitions on U.S. coastal innovation markets, doubles its office presence in Manhattan. The company also owns the 193,000-square-foot property at 311 W. 43rd St., which it purchased for $131 million in late 2018.
For its part, Boston Properties opted to place 540 Madison on the market after its partners decided they wanted to sell their stake in the property. During the company’s first quarter 2019 earnings conference call on May 1, Owen Thomas, CEO of Boston Properties, said that after reviewing the sale scenario with its adviser, it was decided that the disposition of a 100 percent interest in the asset would probably yield better pricing.