Vanbarton Group unloads 292 Madison Avenue at steep loss

The Vanbarton Group has unloaded the Midtown office building where the company is headquartered at a steep loss, after defaulting on a nearly $90 million loan on the property earlier this year.

The investment firm sold the 26-story Art-Deco office building at 292 Madison Avenue, located between East 40th and 41st Streets, to 60 Guilders and Sentry Realty, the real estate arm of American Exchange Group, for approximately $90 million last week, sources told the Commercial Observer.

The group purchased the property for nearly $180 million in 2016, renovating the building’s lobby, elevators, and building systems in 2018. In May, it defaulted on an $87.5 million loan Deutsche Bank had provided for the building in 2019.

The loan had an original term of two years with three one-year extensions, all of which expired this year. Vanbarton and the bank were close to a restructuring deal on the debt, but Deutsche Bank ultimately opted to sell the property.

The above-par sale of the note has cleared the outstanding debt. Newmark’s Adam Spies, Adam Doneger, Josh King, Marcella Fasulo, Avery Silverstein and Doug Harmon negotiated the deal. The commercial real estate firm was hired by Deutsche Bank to sell the non-performing loan.

Vanguard Group has been experiencing financial difficulties at other properties as well. Last year, the company bought the building it owned at 115 Sansome Street in San Francisco, after Bank of America, the company’s lender on the property, put it up for auction in a short sale.

At 200,000 square feet, the purchase price of 292 Madison Avenue breaks down to approximately $450 per square foot.

“We are very active and have significant confidence in the New York commercial real estate market,” Joe Mamrout, executive vice president at American Exchange Group, told the outlet. “This is a trophy property that we are proud to add to our strong portfolio.”

Sentry Realty, the real estate arm of Alen Mamrout’s American Exchange Group, also bought the $200 million debt on Savanna’s 1375 Broadway from Aareal Bank in August, with the debt trading at 90 cents on the dollar. The firm is close to owning the equity on the building, and has retained Savanna to help manage the property.

The same Newmark team, along with Jordan Roeschlaub and Nick Scribani, negotiated the sale.

— Caroline Handel