Columbia Property Trust is in contract to acquire the land beneath 147-149 Madison Avenue for nearly $88 million, sources told The Real Deal.
The Atlanta-based office-centric real estate investment trust would acquire the land under the 126,000-square-foot NoMad office building. Upon the expiration of the 60-year leasehold in January 2018, Columbia would then own the building outright, the REIT’s CEO Nelson Mills confirmed.
Mills said all tenants will vacate prior to the leasehold’s expiration and Columbia will then re-lease the Class B office building.
“We’re exploring options to renovate the building from top to bottom, including the lobby and corridors,” Mills said.
The deal is expected to close at around $675 per square foot, sources added.
The Schwalbe family owns the fee interest, while Abramson Brothers, a Midtown-based investment firm, owns the leasehold. Sources said the land was valued at $90 million when the family weighed selling it a few years ago. The Schwalbe family, whose late patriarch Jacque Schwalbe was a prominent landlord in the city, had owned the land since at least 1969, property records show.
Tenants at the building, constructed in 1917, include the Skin Cancer Foundation, Broadway Suites and Momentum Search Group. Asking rents range from $37 to $45 per square foot, CoStar shows.
Eastdil Secured is representing the seller in the deal. The brokerage declined to comment, while the seller could not be immediately reached.
Elsewhere on Madison Avenue, Vanbarton paid $180 million for a 26-story office building at 292 Madison Avenue and Aby Rosen’s RFR Holding bought an 85 percent stake in the 28-story property at 285 Madison Avenue for $334.1 million last year.
Columbia has been looking to dial up its presence in Manhattan, as well as San Francisco, Boston and Washington, D.C. The REIT disposed of about $3 billion in assets in a total of 25 markets in the U.S. in the past few years, to focus on those four markets, sources said.
In the past two years, the REIT bought the office portion of the former New York Times building at 229 West 43rd Street for $516 million and signed the NYU Langone Medical Center to an entire 390,000-square-foot building at 222 East 41st Street. In 2015, Columbia paid $375 million for 315 Park Avenue South and brought in a string of new tenants such as hedge fund Winton Capital and Equinox.