Crown JV Pays $1.3B for Plaza District Trophy

NEW YORK CITY-A partnership of Crown Acquisitions and Highgate is under contract with the Carlyle Group to acquire 650 Madison Ave. The purchase price of $1.3 billion is nearly double the $680 million Carlyle paid for the 27-story Plaza District office and retail tower in 2008, and is believed to set a record for price per square foot in Manhattan. It's also the highest price paid for a single US commercial property since Google acquired 111 Eighth Ave. for $1.8 billion in late 2010.

In a release, Stanley Chera, founding principal of Crown, calls the 600,472-square-foot 650 Madison “one of the finest properties in all of Manhattan, a trophy in every sense. The unmatched location—outstanding for office and retail use—and the superior quality of the asset solidify its position as a trophy for generations to come. We look forward to continuing the trend established by Carlyle of value creation and excellence in ownership.”

For Carlyle's part, Robert Stuckey, managing director and head of US real estate, says the deal represents “a great outcome for our investors and validates our opportunistic approach.” The '08 acquisition was made by Carlyle Realty Partners V, a $3-billion opportunistic US real estate fund.

650 Madison started life in 1957 as a 10-story corporate headquarters for C.I.T. Corp. After Hiro Real Estate acquired the asset for $105 million in 1984, it added 17 floors.

Carlyle has completed more than 400,000 square feet of leases at 650 Madison since acquiring it five years ago. Polo Ralph Lauren Corp. makes its global headquarters there in a 276,829-square-foot space, and major retail tenants include Crate & Barrel and luxury designer Tod's.

Adam Spies and Douglas Harmon of Eastdil Secured acted as exclusive brokers on the deal announced Monday morning.