650 Fifth Ave to transfer to new entity following $318M Alavi Foundation settlement

The long-running legal battle over the nonprofit founded by the shah of Iran, the Alavi Foundation, and its Midtown West trophy asset at 650 Fifth Avenue, is near its resolution following a $318 million settlement agreement with the United States and other creditors including families of victims of terrorist attacks. According to an amended petition (Alavi Foundation 650 Fifth Avenue) approved in January by the New York State Attorney General, the foundation will transfer its entire asset portfolio, including its 60 percent stake in the Fifth Avenue office tower, to a new Delaware charitable corporation, the Amir Kabir Foundation, formed in 2023.
The other 40 percent of the tower is owned by the Assa Corporation, which the U.S. government determined was affiliated with the government of Iran. The settlement was reached through litigation in the Southern District of New York, 1:08-cv-10934-LAP.
This settlement was reached before the United States and Israel began their bombing campaign of Iran on February 28, and should not be impacted by the military conflict.

The transfer is the cornerstone of a massive settlement agreement involving the U.S. government and “Judgment Creditors” — private plaintiffs holding unsatisfied judgments against the government of Iran. The deal effectively resolves over fifteen years of federal forfeiture litigation. The Promote summarized the building’s history yesterday.

The settlement covers two New York City real estate assets held by the foundation, as well as several properties in other states. The New York properties are the 36-story 650 Fifth Avenue located at the corner of 52nd Street, which was appraised at $435 million as of October 24, 2023, making Alavi’s stake worth $261 million.
The other New York City property is in Woodside, at 55-11 Queens Boulevard, which houses the Razi School, which provides education rooted in Shia Islam. It was appraised at $17.3 million as of October 27, 2023.

As part of the deal, the new entity, through a subsidiary called 650 Fifth Avenue Real Estate Holdings, LLC, will also acquire the remaining 40% interest in the Fifth Avenue tower. That stake was previously held by Assa, an entity federal authorities linked to Iran’s Bank Melli. Following the closing, the new LLC will own 100% of the flagship Manhattan tower.

SL Green Realty and Jeff Sutton are tenants in the building under a 49-year lease of the the entire retail portion of the building, initially signed in 2013, and they sublease space to Nike.

The settlement requires a total payment or release of $318 million to the U.S. government and creditors. To fund this, the new ownership will take on a $200 million mortgage secured by the Fifth Avenue property. The loan carries a 7% annual interest rate for a three-year term, with 4% paid in real-time and 3% accruing.

Additional funding will come from nearly 16 years of accumulated rental income currently sitting in accounts controlled by the U.S. Marshals Service and the partnership.

The transaction is expensive. Total anticipated costs are pegged at $11.6 million, including $5.6 million in mortgage recording taxes and $1.13 million in New York State transfer taxes. Legal and financial advisory fees for the Alavi Foundation alone are expected to exceed $2.1 million, including $500,000 in “brokerage and advisory” fees.

While the new foundation is a Delaware entity, New York Attorney General Letitia James has required state oversight. The “New York Supervision Provisions” require the Amir Kabir Foundation to remain under the Attorney General’s oversight for at least five years. Only after that period can the entity petition a New York court to be released from state supervision.

Once the transfer is complete and the assets—which also include properties in Maryland, Virginia, Texas, and California—are moved, the Alavi Foundation will formally dissolve.

The office building at 650 Fifth Avenue in Midtown West has 336,010 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 97 feet and is 149 feet deep with a total lot size of 13,625 square feet. The lot is irregular. The zoning is C5-3 which allows for up to 15 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $256.6 million.

Prior sales, articles and revenue

The 336,010-square-foot property generated revenue of $34.1 million or $101 per square foot, according to the most recent income and expense figures.

Violations and lawsuits

According to city public data, the property has received $3,135 in OATH penalties in the last year.

There were no lawsuits or bankruptcies filed against the property for the past 24 months.

The neighborhood

In Midtown West, The majority, or 75 percent of the 75.9 million square feet of commercial built space are office buildings, with hotel buildings next occupying 14 percent of the space. In sales, Midtown West has the 4th highest sale turnover among other neighborhoods in the city with $2.2 billion in sales volume in the last two years. For development, Midtown West is the most active neighborhood among other neighborhoods. It had 42.6 million square feet of commercial and multi-family construction under development in the last two years, which represents 56 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of six of the seven commercial properties representing 3,161,234 square feet of the 3,209,955 square feet. The largest owner is RXR Realty and then Vornado Realty Trust. There are no active new building construction projects on this tax block.

The owner

The PincusCo database currently indicates that Vornado Realty Trust owned at least 59 commercial properties with four residential units in New York City with 16,649,039 square feet and a city-determined market value of $7.3 billion. (Market value is typically about 50% of actual value.) The portfolio has $8.1 billion in debt, with top three lenders as JPMorgan Chase, Goldman Sachs, and Morgan Stanley respectively. Within the portfolio, the bulk, or 74 percent of the 16,649,039 square feet of built space are office properties, with retail properties next occupying 11 percent of the space. The bulk, or 92 percent of the built space, is in Manhattan, with Queens next at 5 percent of the space.

The surrounding

Within a 400-foot radius of 648 Fifth Avenue, PincusCo identified four commercial real estate items of interests occurred over the past 24 months. Of those four items, two were sales above $5 million totaling $29.1 million. The most recent of the two was Ramirez Asset Management which bought the 20,210-square-foot, four-unit office building (O6) on 12 East 52nd Street for $14.8 million from Macklowe Properties on April 18, 2025. Of those four items, two were loans above $5 million totaling $1.2 billion. The most recent of the two was Brookfield Properties in which borrowed $1.2 billion from Citibank, Bank of America, Santander Bank, Barclays, and ING Capital secured by one condo unit in the 1,169,666-square-foot, 125-unit mixed-use building (RC) on 666 5th Avenue and one other property on October 30, 2025.

Direct link to the property’s 650 Fifth Avenue ACRIS page.
Direct link to the property’s 55-11 Queens Boulevard ACRIS page