Columbia Property Cuts Bait, Takes Loss On Midtown South Building WeWork Backed Out Of
Nearly three years after WeWork abandoned plans to occupy the fully redeveloped building at 149 Madison Ave., owner Columbia Property Trust sold the property for $10.7M less than it paid.
Columbia Property Trust, at the time an Atlanta-based REIT, paid $87.7M for the 127K SF Midtown South building in 2017. Less than a year later, it signed WeWork to occupy the entire 115K SF, 11-story office space and executed an eight-figure redevelopment.
WeWork terminated the lease in 2020 amid one of its large cost-cutting waves after Columbia Property Trust spent nearly $16M on renovations to the 107-year-old building.
The landlord, which is now based in New York and in 2021 agreed to be acquired by Pacific Investment Management Co., has now cut its losses and sold the building for $77M, according to a deed posted Wednesday in New York City property records.
In a press release sent to Bisnow, Columbia said it sold the building to an undisclosed buyer after completing a "full building redevelopment" of the 12-story property at the corner of Madison Avenue and East 32nd Street.
“The sale of 149 Madison is a product of our team’s creativity, vision and ability to execute within the markets where we invest,” Columbia President and CEO Adam Frazier said in a statement. “We are very pleased to complete this transaction and fulfill our business plan for this asset.”
The buyer is an LLC registered to Gabriel Khezrie, the founder and CEO of Enchanté Accessories. The entity is registered to the East 34th Street headquarters of the beauty and fashion accessory company. Enchanté didn't respond to a request for comment.
Kassin Sabbagh Realty's Albert Sultan and Ike Bibi represented the buyer in the deal, and Newmark's Brett Siegel and Evan Layne represented Columbia Property.
In 2021, in an attempt to lease the building after WeWork's departure, Columbia renovated it again into pre-built suites, adding a mezzanine to the ground floor with a new amenity space, Commercial Observer reported. That effort appears to have borne little fruit: The building's website says 115K SF of offices remain available.
The ground floor retail space had signs up for a Maman coffee shop in June 2022, Google Street View shows, but that location isn't listed on the chain's website.
Columbia took out a $53.2M mortgage on the building from a group of lenders led by Goldman Sachs in December 2021. That loan was transferred to the new owner, according to city records.
