Saudi conglomerate Olayan Group closed on its $1.4 billion acquisition of the Sony Building at 550 Madison Avenue, receiving a $570 million bridge loan from a U.S. subsidiary for Dutch banking giant ING Group.
Olayan America, the U.S. investment arm of Olayan Group, closed on the Sony Building on May 26, according to sources. Apart from the financing from ING subsidiary ING Capital, Olayan — a family-led investment firm founded by the late Suliman Olayan and chaired by his son Khaled — paid for the 37-story, 853,000-square-foot Midtown office tower in cash.
ING’s short-term, senior secured loan to Olayan is backed by a first mortgage on the property, which the Saudi group entered contract to acquire from the Chetrit Group and Clipper Equity in April, as The Real Deal first reported.
“ING committed the bridge facility very quickly at attractive terms so that this deal could conclude within a very tight time frame,” Olayan CFO Nadim Tabbara said in a release announcing the loan.
Besides a single restaurant tenant, the 5,000-square-foot Prime Grill kosher steakhouse, the Sony Building “is effectively 100 percent vacant,” according to the release. Chetrit and Clipper had been clearing out the property’s 776,000 square feet of office space as part of plans to convert the building into a 96-unit luxury condominium tower.
Chetrit and Clipper paid Sony $1.1 billion for 550 Madison Avenue, located between East 55th and East 56th streets, in 2013.
Olayan and asset manager Chelsfield, its minority partner on the $1.4 billion deal, plan to use the property’s vacancy as an opportunity “to rebrand the building and create value by renovating and reconfiguring the existing space,” per the release. – Rey Mashayekhi