LCOR shops leasehold at 545 Madison Avenue

Source said price could exceed $100M
By Katherine Clarke | July 10, 2013 06:00PM

LCOR, a national investment, management and development company, is quietly shopping around its leasehold in a 17-story, 140,000-square-foot building at 545 Madison Avenue, The Real Deal has learned.

The firm, which has developed more than 18 million square feet of commercial space nationwide and manages over 7.5 million square feet, has tapped Eastdil Secured super brokers Doug Harmon and Adam Spies to market the property, although it has not officially come on the market, sources said.

Spies declined to comment, while a representative for LCOR was not immediately reachable. Harmon was not immediately reachable.

LCOR acquired the ground lease to the property from Marx Realty & Improvement Company, a subsidiary of national real estate company Merchants’ National Properties, in 2006, public records show. The firm gut rehabilitated the building, stripping the structure to its steel frame and recladding its132,000 square feet of commercial office space and approximately 7,000 square feet of retail space. LCOR also brought new elevators and new electrical and mechanical systems to the property, which was originally built in 1955.

The land lease is valid through 2081, public records show. Marx did not immediately respond to a request for comment.

The once-struggling LEED gold-certified building is currently more than 90 percent leased to tenants such as Strike Holdings Group, a financial services firm which struck a 10-year deal for 13,754 square feet at the property earlier this year, following LCOR’s push to increase occupancy. Ogden Cap Properties, a real estate investment firm owned by the Milstein family, also inked a 27,000-square-foot lease there last year.

The building’s floor plates range in size from 6,200 to 9,300 square feet, making it well suited to small professional firms like hedge funds and law firms, according to LCOR’s website.

It was not clear how much LCOR was looking to net from the sale of the building, and recent sales of Office Buildings On Madison Avenue have varied greatly on a price per square foot basis. For instance, Aby Rosen’s RFR Realty recently went into contract to purchase an office building at 285 Madison Avenue for $190 million or almost $350 per square foot. Meanwhile, an office tower at 650 Madison Avenue recently went into contract to Crown Acquisitions for $1.3 billion, or more than $2,000 a foot. The recent sale of the Sony building at 550 Madison topped $1,500 per square foot.

The leasehold at 545 Madison will likely sell for between $700 and $800 per square foot, valuing it at more than $100 million, one industry pro told The Real Deal.