After vacating a pair of Upper East Side buildings of tenants over the summer, Vornado Realty Trust has sold them to Naftali Group for about 18% more than it paid four years ago.
The Miki Naftali–led development and investment firm paid $71 million for the two adjacent properties — one retail and one apartment building — at the corner of Madison Avenue and East 86th Street, city property records show. Steve Roth’s Vornado had acquired the properties for $60 million in late 2015.
In a statement, Naftali indicated that he plans new construction for the Upper East Side site to complement a project six blocks south.
“Madison Avenue is one of New York’s most prized thoroughfares, and we’re excited to be building two architecturally significant projects in an area that rarely sees new ground-up development,” said Miki Naftali.
“Our first development on Madison Avenue at 1045 Madison, which is launching sales in the new year, will be the first, new ground-up development along the Avenue in over 20 years, while our second project at 1169 Madison Ave will transform a prime corner on the Upper East Side.”
Andrew Scandalios, Jeff Julien, Bob Knakal and Tom Gammino of JLL represented both sides of the transaction, and were the exclusive agents for Vornado.
Naftali secured a $41.6 million financing package from California-based CIT Bank for the acquisition. Vornado’s 2015 acquisition of the properties involved no debt, according to property records.
A representative for Vornado did not immediately respond to a request for comment.
The retail building at 1167 Madison Avenue had been home to chef Michael White’s trendy Ristorante Morini since 2013, but the restaurant closed in August. At the time, the restaurateur told Eater that the building owner planned to redevelop the property.
A similar story appears to have unfolded over the summer at 50 East 86th Street, the eight-unit apartment building next door. Property records show four transfers of real property between mid-June and mid-July from individuals with addresses in the building to the Vornado-controlled LLC that owns it. Three of those transfers had a value of $2 million each, while a fourth had a documented value of $3.4 million.
According to Vornado’s latest financial disclosures, all 22,000 square feet at the two buildings was “under development or not available for lease” at the end of the third quarter. The previous quarter, however, the retail space was still fully in service, as were 3,000 of the buildings’ 7,000 square feet of residential space.