The Real Deal New York

Madison Capital gets $51M Mesa West loan to buy Flatiron ground lease

11-story office-and-retail building at 71 Fifth Avenue is fully occupied

71 Fifth Avenue in the Flatiron District and Richard Wagman

Madison Capital scored a $51.4 million loan from Mesa West Capital for its purchase of the ground lease at 71 Fifth Avenue, property records filed with the city Friday show.

The Midtown-based real estate investment firm paid nearly $85 million up front for the ground lease for the 11-story Flatiron District office-and-retail building, with annual rent payments starting at $3.5 million. The deal closed Feb. 16. Sources close to the buyer said the $125 million figure that appeared in property records was incorrect.

Annual rent payments will start at $3.5 million with rent resets scheduled for every 25 years of the 99-year term, sources said.

Madison entered contract in October to acquire the fee position, The Real Deal reported at the time.

Family-led firm Samco Properties TRData LogoTINY and the family of WeWork’s global real estate chief Mark Lapidus own the 153,000-square-foot building, which is fully leased. Ovation Corporate Travel is the largest tenant, at 26,000 square feet. That lease expires in 2019.

Madison Capital, founded in 2002 by Richard Wagman and J. Joseph Jacobson, declined to comment.