Here’s what tenants are paying at SL Green & PGIM’s 11 Madison Ave

Here’s what tenants are paying at SL Green & PGIM’s 11 Madison Ave

TRD New York TRD INSIGHTS /
Sep.September 25, 2020 08:30 AM
SL Green CEO Marc Holliday and 11 Madison Avenue (Getty, Google Maps)

SL Green CEO Marc Holliday and 11 Madison Avenue (Getty, Google Maps)

When SL Green acquired 11 Madison Avenue for $2.6 billion from the Sapir Organization and CIM Group in 2015, CEO Marc Holliday called the full-block office property a “serious, serious office building” that would establish the firm as a major landlord in Midtown South.

The 2.3 million-square-foot Art Deco tower next to Madison Square Park, built in phases between 1932 and 1952, was at one point designed to be the world’s tallest building before the Great Depression scaled those ambitions back.

SL Green financed its acquisition of the property with a $1.1 billion senior CMBS loan and $325 million in mezzanine debt. Documents related to the securitization, as well as subsequent surveillance reports from Kroll Bond Rating Agency, provide an inside look at the property’s finances.

The 29-story property serves as the North American headquarters for two major international firms, Switzerland’s Credit Suisse and Japan’s Sony Corporation, which together account for more than 80 percent of the building’s floor area and rent roll.

Credit Suisse, which has been at the property since 1996, pays a slightly below-market $65 per square foot for its 1.3 million square feet, which include the second through 11th floors, the 13th floor, and space in the lobby, concourse and basement.

Sony occupies office space on the building’s top 11 floors, having relocated to 11 Madison soon after selling its old headquarters, 550 Madison Avenue, to the Chetrit Group for $1.1 billion. The electronics and media giant also leased 17,555 square feet of retail space on the ground floor and mezzanine level for its “SONY Experience” store — which it closed permanently after the coronavirus hit. Taking the retail and office space together, Sony is paying an average of $74 per square foot.

Other office tenants at the building include business review app Yelp, talent and media agency Endeavor, and venture capital firm Andreessen Horowitz, all of which are based in California.

According to Kroll’s latest surveillance report, Fidelity Brokerage Services’ retail space at the property has remained open, while stationery and gift retailer Paper Source was temporarily closed as of July. The three-Michelin star restaurant at the building, Eleven Madison Park, recently worked out a deal with SL Green to reopen.

A year after acquiring the building, SL Green sold a 40 percent stake in it to Prudential’s PGIM Real Estate for $480 million. The property is connected by a skybridge and tunnel across 24th Street to SL Green’s One Madison Avenue.






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