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Cornerstone puts tower at 551 Madison Avenue up for sale
Asset manager could expect it to fetch at least $180M: sources
Asset management firm Cornerstone Real Estate Advisers, now known as Barings following a $275 billion merger Monday, is looking to sell the 150,000-square-foot office-and-retail building it owns at 551 Madison Avenue, sources told The Real Deal.
The asking price wasn’t clear, but sources said Barings could be looking to get north of $180 million at a minimum.
Connecticut-based Cornerstone paid $128 million in 2012 to buy the 17-story building at 551 Madison Avenue from LaSalle Investment Management.
The building, located at the corner of East 55th Street, was 91 percent occupied at the time of purchase, and since then Cornerstone [TRDataCustom] has inked a handful of small leases with office tenants on the upper floors.
But an outsized portion of the property’s value is weighted toward its retail, which boasts 75 feet of frontage along Madison Avenue and counts tenants such as shoemaker Allen Edmonds and eyewear shop Robert Marc.
CBRE’s Darcy Stacom and Bill Shanahan, who brokered the sale four years ago, are currently marketing the property, sources told The Real Deal. Representatives for Cornerstone and CBRE declined to comment.
The 2012 purchase price works out to about $850 per square foot. A source not affiliated with the property said Cornerstone, seeking a healthy internal rate of return, could be looking to sell for somewhere between $1,200 and $1,500 per square foot. That would work out to a purchase price of roughly $180 million to $225 million.
The French clothing company Lacoste anchors the office floors with a little more than 25,000 square feet. Other tenants include Omni Hotels and Resorts, owner of the 398-room Omni Berkshire Hotel at Madison Avenue and 52nd Street, as well as various financial-services companies and law firms.
In addition to The Plaza District building, Cornerstone also owns the 520,000-square-foot office property at 100 Wall Street and hotels including the Algonquin on West 44th Street and the Muse on West 46th Street.
Institutional asset manager Babson Capital Management announced Monday it had completed the merger of Cornerstone Real Estate, Barings Asset Management and two other subsidiaries of Massachusetts Mutual Life Insurance Company to form one company operating under the name Barings with $275 billion worth of global assets under management.