SL Green Realty just closed on its $2.6 billion purchase of 11 Madison Avenue from the Sapir Organization and minority partner CIM Group. The deal, the largest single-building transaction in New York City history, is a huge coup for Sapir, which bought the property in 2003 for $675 million and managed to bring in marquee technology and media tenants.
The Sapir Organization, led by chief executive Rotem Rosen and president Alex Sapir, tripled the net operating income of the building to $120 million from $40 million, according to sources. The 2.3 million-square-foot Art Deco skyscraper, located between East 24th and 25th streets, has tenants such as Sony, which is taking 500,000 square feet at the top of the 30-story tower, and Yelp, which is taking over 150,000 square feet. Anchor tenant Credit Suisse also renewed its lease at the tower last year, but downsized to 1.2 million square feet to make room for Sony. Talent agency powerhouse William Morris Endeavor is taking about 70,000 square feet.
The $2.6 billion purchase price — which includes about $300 million in lease-stipulated improvements — is the second-highest ever paid for a New York City office tower after Boston Properties’ $2.8 billion purchase of the GM Building, at 767 Fifth Avenue in Midtown, in 2008. It is also the largest single-building transaction in the city’s history, as the GM Building deal was part of a $3.95 billion package that included three other towers.
“We tend not to hold on to assets in perpetuity,” he said at the time. “I would look at this asset as on a three-to-five-year period and then we’ll always readjust from there.” SL Green is partially funding the purchase through the sale of assets such as Tower 45 at at 120 West 45th Street and 131-137 Spring Street.
The 11 Madison deal was brokered by CBRE’s Darcy Stacom and Bill Shanahan.