510 Madison Goes to Boston Properties

NEW YORK CITY-Two months after an agreement was reached between Macklowe Properties and SL Green Realty Corp. to halt a foreclosure on Macklowe’s 510 Madison Ave., the boutique office tower has been sold to Boston Properties. The $280.5-million purchase price equals the aggregate principal and accrued interest on the property’s existing senior mortgage loan and senior mezzanine loan, the Boston-based REIT said in a statement late Friday afternoon.

Earlier this month, Boston Properties bought the $69-million junior mezzanine loan on the property for about $22.5 million from a third party, which the New York Post identified as a group affiliated with O’Connor Capital Partners. Following closing of the Macklowe deal, Boston Properties will be sole owner of 510 Madison.

Harry Macklowe, who developed the newly built, 350,000-square-foot office tower, will serve as a project consultant and advisor and as co-chairman of the marketing and leasing advisory committee for 510 Madison. CB Richard Ellis EVP Paul Amrich will be in charge of leasing the property, which currently is vacant. Its small floorplates, generally in the 11,000-square-foot range, are intended for hedge funds and boutique financial firms.

The 510 Madison deal occurs about two years after Boston Properties acquired the General Motors Building at 767 Fifth Ave. and other properties from Macklowe for $3.95 billion. In a statement, Mortimer Zuckerman, the REIT’s chairman and CEO, cites the “productive relationship” that 2008 deal fostered. He adds that 510 Madison is “the only new office development in the Plaza District and, given its modern design and amenities, it is well positioned to attract the highest-quality tenants.”

In late June, Macklowe and SL Green had reached an agreement over senior debt on 510 Madison that SL Green had acquired in 2009 for $195 million. Under the agreement, Macklowe would have had until March 1, 2011 to repay approximately $253.2 million to SL Green or face a non-contested foreclosure on the 30-story office property. In addition, Macklowe would have to make a payment of $822,500 by this Sept. 1 to extend the loans. An SL Green spokesman tells GlobeSt.com the company has no comment on the sale to Boston Properties.