NEW YORK CITY-RFR Holding and an unnamed real estate investment fund said Friday they had closed on their acquisition of 285 Madison Ave., which formerly served as the worldwide headquarters of advertising agency Young & Rubicam. According to a release from WPP PLC, the London-based parent company of Y&R, the 513,000-square-foot asset traded for $189.25 million. WPP acquired the property along with Y&R, its sole tenant, in 2000.
RFR plans a $50-million total repositioning of the now-vacant Midtown East property, which had served as Y&R’s headquarters since its founding in 1926. Capital improvements will include total infrastructure, common corridors, restroom and building system upgrades, according to a release.
This past September, the ad agency closed on a 340,000-square-foot office condominium purchase and lease at 3 Columbus Circle, paying $143.6 million for the condo interest. The following month, it expanded at the repositioned 3 Columbus, also known as 1775 Broadway, adding 34,000 square feet for its Brand Union division. Y&R will move into 3 Columbus beginning in 2013, according to WPP.
In a statement, RFR principal Aby Rosen says the new owners of the 28-story Madison Avenue property are “delighted to have acquired a well-located asset such as 285 Madison, which can benefit from RFR’s long history of retrofitting office properties to their full potential. We are confident that after we perform a total building renovation, consistent with the RFR imprimatur, the building will attract a credit-worthy tenancy for long-term leases.” He adds that 285 Madison, “at the apex of global business and world-class restaurants, hotels and entertainment, is indeed an opportunistic acquisition and a perfect complement to our existing, esteemed class A office portfolio.”
The office property features setbacks that create variable and flexible floor plates ranging from 11,000 to 24,000 square feet, RFR says in a release. According to the release, RFR sees this as ideal for medium-sized tenants that want a single floor identity as well as for large corporations seeking contiguous space. There is also a retail component of about 30,000 square feet, with 150 feet of street frontage at its Madison Avenue and 40th Street corner.
That location puts the property within the rezoning district proposed this past summer by the New York City Department of City Planning. It’s bounded generally by Third and Madison avenues and by 40th and 57th streets. Were the rezoning to become reality, 285 Madison could add about another 50,000 square feet in rebuilding, the New York Post reported this past July when the property hit the market.
Still in the offing as of deadline Friday, according to Real Capital Analytics data, is an RFR acquisition of another property along the same street, 350 Madison Ave., owned by Kensico Properties. Kensico acquired the 394,000-square-foot, 24-story office tower for $194.5 million in 2004, according to RCA; the pending sale to RFR would be for about $261 million, or $664 per square foot.