Related Eyes Luxury Condo/Hotel Project After Buying 625 Madison For $630M
A new chapter is afoot for 625 Madison Ave., a 17-story office building one block from Central Park.
Related Cos. is planning a whole new building on the site, tearing down the 563K SF office tower to make way for a condo and hotel building with ground-floor retail, The Real Deal reports, citing unnamed sources.
Billionaire Stephen Ross’ company acquired 625 Madison Ave. from SL Green in a deal that went into contract in December. Related spent $632.5M on the purchase, with SL Green hinting at the potential for other uses of the property at the time of the sale.
Related is already in discussion with high-end retail and luxury hotel operators about its plans for the property’s future, TRD reported. A Related spokesperson didn't immediately return Bisnow's request for comment.
Related’s purchase of the Madison Avenue office tower was one of the biggest office sales last year, working out to $1,123 per SF.
Speculation over 625 Madison’s value was a persistent theme in the long-running battle for ownership prior to the Related deal, Crain’s New York Business reported.
SL Green purchased the leasehold for the property in 2004. Nine years later, billionaire investor Ben Ashkenazy and partner Michael Alpert acquired the ground under the property for $400M.
In 2018, Ashkenazy failed to meet a payment deadline for the $40M mezzanine loan he used to finance his fee position. SL Green then purchased a piece of the mezzanine debt. By the time an arbitrator hiked the rent to $20.25M for the leasehold in 2023, SL Green and its partners foreclosed on the mezzanine debt and won ownership of the ground from Ashkenazy in August before selling the ground and building to Related.
Related's reported plans are another sign of renewed investment in the Plaza District near Central Park. European fashion giants Kering and Prada dropped more than $1.5B combined on Fifth Avenue retail since December, and LVMH is reportedly looking for a deal of its own.
Its most recent major hospitality project in New York was at Hudson Yards, where it developed a luxury condo tower at 35 Hudson Yards, which also contains the Equinox Hotel. While the hotel was recently named one of the world's 50 best, the condos have struggled to sell, The Wall Street Journal reported.
