Mortimer Zuckerman and 510 Madison Avenue
Boston Properties said this afternoon that it completed the acquisition of developer Harry Macklowe’s troubled office tower at 510 Madison for $275 million.
Mortimer Zuckerman’s Boston Properties agreed to buy the 350,000-square-foot office tower between 52nd and 53rd streets in August, after buying a junior mezzanine loan from O’Connor Capital Partners, which previously failed to block a workout agreement between Macklowe and senior lender SL Green.
A spokesperson for Boston Properties said the closing price was below the projected price of $281 million due to lower-than-expected closing costs.
SL Green was previously embroiled in a nearly year-long struggle to take over the building after Macklowe defaulted on his senior debt. SL Green acquired that debt and planned to foreclose on the property, but agreed to a workout agreement after a long court battle with Macklowe. SL Green is expected to gain $66 million on the sale according to one analyst’s report, as it held $280.5 million in debt on the property. It remains unclear whether SL Green was completely paid off through the acquisition.
Boston Properties, which was not immediately available for comment, said in a statement that it expects to pay about $15 million to complete construction of the empty tower, and has incurred about $2 million in closing costs, which will be expensed during the third quarter of 2010.
As previously disclosed, Macklowe is being retained as a consultant as part of the agreement and CB Richard Ellis broker Paul Amrich will continue to manage leasing at the building.