Extell pays $159.4M to Williams Equities for 655 Madison in Lenox Hill

UPDATED 11:51 a.m., October 17, 2024: Extell Development through the entity 655 Madison LLC paid $159.4 million to Williams Equities through the entity Plaza Madison LLC for the office building (O4) at 655 Madison Avenue in Lenox Hill, Manhattan. The expected use is ground up development. Bloomberg earlier today reported the transaction citing sources saying the purchase was for condominiums. Williams filed demolition plans for the building on August 16, 2024, through job number M01089781.
The sale was financed with a $150 million loan from Tyko Capital, property records show. Tyko is backed by Elliott Investment Management.
The deal closed on October 10, 2024 and was recorded on October 16, 2024. The property has 198,347 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $803 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The signatory for Williams Equities was William E. Stempel. The signatory for Extell Development was Gary Barnett. The contract date was May 8, 2023.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Extell Development purchased three properties in three transactions for a total of $145.8 million and sold eight properties in eight transactions for a total of $376.2 million over the past 24 months.
The seller Williams Equities had not purchased any other properties and had not sold any properties over the same time period.

The property

The office building in Lenox Hill has 198,347 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 100 feet and is 109 feet deep with a total lot size of 10,946 square feet. 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 $126.9 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received $1,000 in OATH penalties in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Lenox Hill, The bulk, or 34 percent of the 53.3 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 30 percent of the space. In sales, Lenox Hill has the highest sale turnover among other neighborhoods in the city with $4.3 billion in sales volume in the last two years. For development, Lenox Hill is the 6th most active neighborhood among other neighborhoods. It had 6.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 11 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other office buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of eight of the 11 commercial properties representing 947,485 square feet of the 1,251,557 square feet. The largest owner is Hartz Mountain Industries, followed by Partyoftwo Llc and then Adler Group.
There are no active new building construction projects on this tax block.

The majority, or 49 percent of the 1.3 million square feet of built space are hotel buildings, with office buildings next occupying 48 percent of the space.

The seller

The PincusCo database currently indicates that Williams Equities owned at least two commercial properties in New York City with 553,066 square feet and a city-determined market value of $298.4 million. (Market value is typically about 50% of actual value.) The portfolio has $220 million in debt, borrowed from Citibank and 3650 REIT. Within the portfolio, all identified are office properties. They are all located in Manhattan.

The buyer

The PincusCo database currently indicates that Extell Development owned at least 64 commercial properties with 651 residential units in New York City with 2,577,734 square feet and a city-determined market value of $661.9 million. (Market value is typically about 50% of actual value.) The portfolio has $6.9 billion in debt, with top three lenders as Guggenheim Partners, Blackstone Group, and JVP Management respectively. Within the portfolio, the bulk, or 42 percent of the 2,577,734 square feet of built space are specialty properties, with elevator properties next occupying 22 percent of the space. The bulk, or 96 percent of the built space, is in Manhattan, with Brooklyn next at 4 percent of the space.

Clarification: An earlier version of this post included not only the $159.4 million transfer price, but a price of “more than $200 million” that Bloomberg cited as the sale price. Bloomberg has since corrected their story and so we removed reference to the $200 million price.

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