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Olayan America Acquires Nearly Vacant Sony Bldg. on Madison Ave.

ING Capital Finances $1.4 Billion Acquisition of Manhattan Landmark
June 3, 2016
Olayan America, the U.S. investment arm of Saudi Arabia-based The Olayan Group, purchased 550 Madison Ave. in Manhattan, formerly known as the Sony Building, for a reported $1.4 billion (about $1,642/square foot).

ING Capital LLC originated a $570 million senior secured bridge loan for Olayan. The short-term loan is secured by a first mortgage on the property.

The 37-story office tower in the Plaza District of Manhattan has 852,830 square feet of rentable mixed-use space. The building features approximately 776,000 square feet of office space, retail frontage on Madison Avenue, and exhibition and museum space.

The property is effectively 100% vacant, with just one restaurant tenant occupying 5,000 square feet. Olayan and asset manager Chelsfield plan to renovate and reconfigure existing space to reposition the building.

"The Sony Building is a New York City landmark," said Craig Bender, managing director with ING. "We are especially proud to have worked on this deal for one of our long-standing global clients. Our long-term real estate investment outlook is strong, and we look forward to seeing how Olayan and Chelsfield reposition this property in the future."

Built in 1984 as the global headquarters of AT&T, the building traded hands on just two previous occasions, first to Sony Corp. in 2002 and then in 2013 to the Chetrit Group, the immediate past owner. Chetrit had planned to convert the tower into high-end residential housing, but abandoned those plans and listed the building for sale this spring.

"The property has been maintained to a high standard and has never previously been available to the open market for office leasing," said Tony Fusco, head of real estate at Olayan America.

For more information, see CoStar Sale Comp #3606156.

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