- The $120M non-performing loan on 444 Madison Avenue is up for sale, offering a winning bidder direct ownership through a deed-in-lieu of foreclosure.
- The 42-story, 466.8 KSF building is currently 52% leased, with significant upside potential from leasing 236 KSF of vacant space.
- Grandfathered illuminated signage and a 6% increase in Plaza District office rents in 2024 enhance the building’s investment attractiveness.
According to Commercial Observer, the $120M non-performing loan on 444 Madison Avenue, an iconic office building in Manhattan’s Plaza District, is officially up for sale.
Deeper Look
Wells Fargo (WFC), the property’s lender, is directing the sale due to the loan’s default status, with Newmark (NMRK) leading the marketing efforts.
According to sources, the loan is expected to trade at a slight discount, allowing the winning bidder to assume ownership via a deed-in-lieu of foreclosure.
Newmark’s team, including Adam Spies, Adam Doneger, Doug Harmon, Marcella Fasulo, Avery Silverstein, and Brett Siegel, is spearheading the sale. A buyer is likely to be announced by early 2025.
Leasing Opportunities
Built in 1931 and renovated in 2010, the 466.8 KSF, 42-story building occupies a full city block between East 49th and East 50th streets. Currently, the building is 52% leased, leaving 236 KSF of vacant space that presents a significant value-add opportunity.
According to the offering memorandum, filling the vacancies could boost the building’s net operating income from $3M to $15M annually.
The property’s history adds to its appeal. It previously served as the headquarters for Burberry, which leased 68.3 KSF from 2009 to 2022. Burberry’s illuminated signage on the 42nd floor, which displays time and temperature, is grandfathered in, offering a unique perk for future tenants in a market where such features are no longer permitted on new buildings.
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Ground Lease Terms
Plaza District office space experienced a 6% rent increase in 2024, marking the most significant rise in nearly a decade. Over the past year, leasing activity totaled 690 KSF.
The property also includes a ground lease that extends until 2089, providing long-term stability. A new owner will have the opportunity to restructure the lease, initially negotiated by Westbrook Partners and the ground leaseholder, the Kandel family.
Investment Potential
With its prime location, substantial leasing upside, and unique grandfathered features, 444 Madison Avenue offers investors a rare opportunity to acquire a trophy property at a potential discount.
While Wells Fargo, Westbrook Partners, and Newmark have declined to comment, the sale signals a significant moment for Manhattan’s office market as lenders and investors navigate evolving commercial real estate conditions.
