Friedland Properties and Nightingale Properties have lost their grip on 645 Madison Avenue as lender East West Bank is taking over the leasehold of the 164,000-square-foot building.
The takeover comes in the form of an assignment of lease in lieu of foreclosure. East West Bank provided $50 million in loans to aid the developers’ acquisition of the building’s lease in 2015, according to PincusCo, including $5 million in construction loans.
The lease is valued at $79.6 million, slightly more than the $76 million the developers paid for the ground lease in 2015, which they bought from TF Cornerstone. Pershing Square Capital Management’s Bill Ackman was also an owner via personal investment, the New York Post previously reported.
Asking rents for the building’s office space in 2015 were believed to be north of $100 per square foot and the property included 36,000 square feet of vacant retail space. The two companies planned on infusing capital into the building, The Real Deal reported at the time, which was the first Manhattan project for Nightingale.
PincusCo reports almost 50 Department of Buildings renovation projects were filed for the building, costing more than $13 million.
Two years ago, Friedland and Nightingale put the building up for sale, but failed to find any buyers. Marcus & Millichap marketed the building and sought about $120 million for it, according to the New York Post.
The transfer of the lease closed last week. According to PincusCo’s analysis, the transfer price was $483 per built square foot.
Friedland Properties principal Larry Friedland is a titan of Madison Avenue, but his company has skewed towards residential projects as of late. Meanwhile, Nightingale and Wafra Capital Partners recently landed a $500 million loan package for 111 Wall Street.
[PincusCo] — Holden Walter-Warner