New owners attempt to reposition Madoff-tarnished building

New York /
Jan.January 24, 2011 09:04 AM
Lipstick Building and Bernard Madoff

The new owners of the Lipstick Building, the 636,000-square-foot Third Avenue office tower where Bernie Madoff carried out his massive fraud, are making a push to rent out the building’s empty space with the help of $15 million in new capital and a lobby redesign, according to the Wall Street Journal. The owners, who are also now looking for other New York investment opportunities, are Daniel Elsztain, part of the family that is Argentina’s largest landlord, and Paul and Maurice Marciano, the founders of retailer Guess. They took control of 885 Third Avenue in a restructuring deal last month in which they upped their stakes in the property, valued at around $395 million, in exchange for a write down of the $210 million in debt owned by the Royal Bank of Canada to $130 million. The building is currently 92.5 percent occupied (Madoff had occupied 8 percent of the building, some of which is now leased month-to-month by the Federal Bureau of Investigation and the firm that bought out Madoff’s trading operations). “Over the past few years, [the building] has slipped off its top perch, due to cash flow issues,” said Gerard Nocera of Herald Square Properties, who was hired by the landlords to help reposition the property. “Now with positive cash flow again, the building will be able to right itself.” [WSJ]


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