SL Green Realty acquires 625 Madison fee from Ashkenazy through $195M debt auction

SL Green Realty through the entity 625 Nominee LLC acquired the fee interest under the office building at 625 Madison Avenue, in Midtown East, Manhattan, from Ben Ashkenazy’s Ashkenazy Acquisition through the entity 625 Mad Holdings LLC. SL Green acquired control through an UCC auction for a $195 million mezzanine loan. The transaction was valued at $233.8 million. SL Green already controls the leasehold. The value in a debt auction is often the existing principal and additional interest.
The deal closed on September 12, 2023 and was recorded on September 27, 2023. The property has 535,344 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $436 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.)
This was an entity level transfer, not a deed. The Real Deal reported on this transaction last month that SL Green Realty, as part of a group of mezzanine lenders holding a $195 million note from Ashkenazy, which owned the fee, took control of the property from Ashkenazy Acquisition through a UCC auction. In 2019 SL Green bought a stake in a group that owned the mezzanine note, including the U.K.-based Children’s Investment Fund and Winthrop Realty Trust, The Real Deal reported. Ashkenazy bought the fee in November 2013 for $400 million. The state transfer tax paid for this new transaction, $4.18 million, implied a total transfer value of $642 million. It’s unclear if that represents the full value of the property, both fee and leasehold. That would give a value of about $1,100 per square foot.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer SL Green Realty purchased four properties in four transactions for a total of $2.4 billion and sold 34 properties in 12 transactions for a total of $1.4 billion over the past 24 months.
The seller Ashkenazy Acquisition purchased five properties in two transactions for a total of $46.7 million and sold four properties in four transactions for a total of $93.7 million over the same time period.

The property

The office building in Midtown East has 535,344 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 200 feet and is 200 feet deep with a total lot size of 35,145 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 $263.9 million.

Violations and lawsuits

The property was involved in four lawsuits and zero bankruptcies over the past two years. The highest value suit was a $1 million judgment concerning a ground lease filed on December 29, 2021, by SL Green Realty. In addition, according to city public data, the property has received one DOB violation and $6,060 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 Midtown East, The majority, or 81 percent of the 62.6 million square feet of commercial built space are office buildings, with hotel buildings next occupying 7 percent of the space. In sales, Midtown East has the 2nd highest sale turnover among other neighborhoods in the city with $3.5 billion in sales volume in the last two years. For development, Midtown East is the 2nd most active neighborhood among other neighborhoods. It had 16.6 million square feet of commercial and multi-family construction under development in the last two years, which represents 27 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 two of the four commercial properties representing 2,360,164 square feet of the 2,463,342 square feet. The two identified owners are SL Green Realty and Boston Properties.
There are no active new building construction projects on this tax block.

The majority, or 100 percent of the 2.5 million square feet of built space are office buildings, with development buildings next occupying 0 percent of the space.

The seller

The PincusCo database currently indicates that Ashkenazy Acquisition owned at least five commercial properties in New York City with 337,415 square feet and a city-determined market value of $61.8 million. (Market value is typically about 50% of actual value.) The portfolio has $114.1 million in debt, with top three lenders as Benefit Street Partners, Wilmington Trust, and Bank of Montreal respectively. Within the portfolio, the bulk, or 62 percent of the 337,415 square feet of built space are retail properties, with industrial properties next occupying 25 percent of the space. The bulk, or 60 percent of the built space, is in Queens, with Manhattan next at 40 percent of the space.

The buyer

The PincusCo database currently indicates that SL<iframe src=”https://www.google.com/maps/embed?pb=!4v1695901258424!6m8!1m7!1skuST2Qs8zb6o8GTcGoLVhQ!2m2!1d40.76331096781968!2d-73.97148919041727!3f120.08449026755599!4f51.50122342815962!5f0.7820865974627469″ width=”600″ height=”450″ style=”border:0;” allowfullscreen=”” loading=”lazy” referrerpolicy=”no-referrer-when-downgrade”></iframe> Green Realty owned at least 36 commercial properties with 881 residential units in New York City with 17,346,981 square feet and a city-determined market value of $7.5 billion. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 93 percent of the 17,346,981 square feet of built space are office properties, with elevator properties next occupying 4 percent of the space. They are all located in Manhattan.

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