The Real Deal New York

509 Madison Avenue in play

Kensico Properties looking to sell leasehold
By Mark Maurer | August 04, 2017 02:35PM

509 Madison Avenue and Fouad Chartouni (Credit: Getty Images)

Kensico Properties has put the leasehold for its 23-story Midtown office building at 509 Madison Avenue on the market, the landlord confirmed to The Real Deal.

The landlord recently hired HFF to market the leasehold for the 165,000-square-foot Art Deco property at the southeast corner of East 53rd Street for sale.

The leasehold for the property, built in 1929, could sell for about $1,000 per square foot, or $165 million, said sources familiar with the building.

Kensico principal Fouad Chartouni said the firm plans to retain the fee position. He declined to comment on pricing.

Office tenants include the Brazilian-American Chamber of Commerce, Chinese investment manager CITIC Capital and private equity shop Flexis Capital. European fine jewelry boutique Cellini Jewelers is among the retailers. Office asking rents average $75 per square foot at the property.

Records show Kensico acquired the property in 1985 for an unspecified amount.

An HFF team led by Graham Stephens is marketing the building. HFF declined to comment, and Kensico could not be reached.

Kensico, a Midtown-based landlord that is particularly active in Greenwich, Connecticut, brought the property nearly to full occupancy last year more than 30,000 square feet in leases were soon set to expire. Chartouni said the property is now 90 percent leased.

The building sits directly across the street from Boston Properties’ 30-story office tower 510 Madison Avenue, where office asking rents are around $120 per square foot.

Kensico has sold off its stake in several Midtown office assets in recent years, including 11 East 44th Street and 352 Madison Avenue – the latter of which it sold to Aby Rosen’s RFR Realty for $261.5 million in 2012.

Although the Midtown office investment sales market is in a lull, some recent deals have hovered around $1,000 per square foot. The Kabbalah Centre International agreed to buy the Fine Arts Building at 232 East 59th Street for about $60 million, or north of $1,000 a footand HNA Group bought 245 Park Avenue for $2.21 billion, or $1,227 a foot.