Brookfield is nearing a deal for a stake in a Midtown South office building at a valuation around $400 million — the latest example of big-ticket office deals making a return to New York.
The Canadian private equity giant has reached an agreement to buy a 49 percent stake in 63 Madison Avenue from a joint venture of George Comfort and Sons, Jamestown and Loeb Partners Realty, The Real Deal has learned.
The deal follows similar ones from investors like RXR, Tishman Speyer and Blackstone in recent weeks that have marked a resurgence in the investment sales market for offices after a languid few years.
Representatives for Brookfield, George Comfort and Sons, Jamestown and Loeb Partners Realty did not immediately respond to requests for comment. A Newmark team led by Adam Spies and Adam Doneger negotiated the deal.
The owners put the 860,000-square-foot, 15-story 63 Madison up for sale earlier this year after signing one of 2024’s biggest office leases: a 337,000-square-foot deal with American Eagle Outfitters.
Still, the building is only 76 percent leased, according to an offering memo, and likely needs a capital injection to help fill the vacant space.
The $400 million figure values the building at about $465 per square foot. In 2016, George Comfort and Loeb Partners sold stakes at 63 Madison and another building a few blocks uptown at 200 Madison Avenue to Jamestown in a deal that valued both buildings at $1.15 billion, or roughly $710 per square foot.
Fronting the whole block along Madison Avenue between East 27th and East 28th streets, the mid-rise 63 Madison was developed in 1962 as an annex for New York Life Insurance, whose headquarters are across the street.
Office buildings had fallen out of favor with investors during the height of the remote-work era alongside rising interest rates — with some even drawing a red line across the asset class. But that’s changed even in the last few weeks with a spate of headline deals recalling the days when large, nine-figure sales — even those that crossed the $1 billion threshold — were more the norm.
RXR, along with partner Elliott Investment Management, last month signed a deal to buy the former IBM Building at 590 Madison Avenue for close to $1.1 billion. That followed a deal in January when RXR bought a 49-percent stake in the office tower at 1211 Sixth Avenue at a valuation of $1.2 billion.
Blackstone recently bought a 49-percent stake in 1345 Sixth Avenue from Fisher Brothers. While the valuation wasn’t known, an appraisal for the property’s recent $850 million CMBS loan valued the skyscraper at around $1.9 billion.Â
And Tishman Speyer earlier this week closed on its $105.5 million purchase of 148 Lafayette Street in Soho — the company’s first New York office acquisition since 2019.
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