Sapir selling Madison Avenue office towers

Midtown buildings appeared in disputes with Rotem Rosen, WeWork

New York /
Mar.March 04, 2022 09:45 AM

Alex Sapir, chief executive officer, Sapir Organization in front of 260 and 261 Madison Avenue (LoopNet, Sapir Organization)

The Sapir Organization is looking to empty its hand of two Midtown buildings.

The developer is marketing the Midtown South buildings at 260 and 261 Madison Avenue, according to the Commercial Observer. A person with knowledge of the deal told the outlet Sapir is aiming to sell the properties for about $600 million.

The two office properties span close to 1 million square feet and are approximately 80 percent leased. One of the tenants is Sapir itself, which has its headquarters at 261 Madison.

Sapir purchased the properties, which are across the street from one another, in 1997.

CBRE’s Darcy Stacom and William Shanahan are marketing the two towers, the Observer reported. Stacom told the outlet she will rebrand the buildings as One and Two Grand Central South.

The office properties are connected to a complicated legal battle between Alex Sapir and his former business partner Rotem Rosen. A federal judge in October dismissed a $100 million lawsuit that alleged Rosen stole tens of millions of dollars and trade secrets.

Rosen claimed Sapir defaulted on a $60 million note connected to a $75 million buyout Sapir agreed to pay Rosen in 2017. The alleged default was triggered by the mezzanine refinancing of the entity that owns the Midtown South office buildings, which guaranteed Sapir’s debt.

The same judge allowed two of Rosen’s claims tied to his multimillion-dollar buyout agreement with Sapir to move forward, but the tangle of lawsuits the former brothers-in-law have filed over the years has gotten so knotted that both sides claimed victory with the October ruling.

The office towers Sapir is reportedly looking to sell are at the center of a lawsuit filed in August claiming Adam Neumann personally guaranteed WeWork’s lease at the buildings. The landlord alleges the co-working firm abandoned its lease early and, along with its former CEO, owes nearly $17 million in damage. Neumann filed a response denying the allegations and brought counterclaims of his own in late December.

The marketing of the properties comes as the Manhattan office market continues to struggle.

Office availability hit a new high last month, according to Colliers, as slightly under 94 million square feet was available to rent. The vacancy rate hit 17.4 percent, up 74 percent from the start of the pandemic.

Midtown South has stood out from the rest of the market. While availability in the market remains at a record high, it’s the only Manhattan corridor to have higher asking rents than its pre-pandemic average.

Katherine Kallergis contributed reporting.

[CO] — Holden Walter-Warner





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