PGIM has provided a $88.5 million loan to Madison Capital & Lubert-Adler Partners to refinance 71 Fifth Avenue, a trophy office and retail building in New York City. The three-year bridge financing includes two, one-year extension options and will be utilized while Madison Capital completes re-leasing the remaining top two office floors and Fifth Avenue corner retail space, and concludes redeveloping the property. The renovation plans include new lobbies, modernized elevators, and upgraded tenant spaces.
71 Fifth Avenue is located on the southeast corner of 15th Street and Fifth Avenue in the heart of the Flatiron district. Located one-half block from Union Square, the building has excellent transportation options with twelve subway lines within three blocks to the property. International retailers such as Lululemon, Zara and Michael Kors, as well as neighborhood amenities like Madison Square Park, Eataly and the Gramercy Park Hotel, are in close proximity.
The 151,889-square-foot office portion of the property features loft style layouts with 12-foot, vaulted ceilings, oversized windows and open, efficient rectangular floor plates, and includes top-tier technology, media and advertising firms as tenants. The 18,441-square-feet of retail space features two suites with 18-foot ceiling heights, 70 feet of Fifth Avenue frontage, and a Landmark-approved branded awning and flag.
“Since acquiring 71 Fifth Avenue in 2017, we undertook efforts to modernize the property, enhance tenancy and give the building a stronger identity in the market,” said Jonathan Ratner, Managing Director for Madison Capital. “PGIM was flexible in structuring the financing to meet our needs for the next phase of the investment. We will work closely with PGIM to continue executing redevelopment plans and bring this premier asset to full stabilization.”
“The highly desirable location of this mixed-use property and the strength of the sponsor and their business plan make this an attractive financing opportunity that will provide income-driven cash flow over the loan term for our investors’ portfolio,” said Steve Bailey, Managing Director and portfolio manager for PGIM’s real estate debt strategies.
Justin Levitt, based in New York, led the transaction on behalf of PGIM. Meridian Capital Group served as the broker on the transaction.
About Madison Capital
Madison Capital is a leading real estate investment and operating company focused on creating exceptional opportunities in evolving markets. Since the firm’s inception in 2002, Madison has grown its portfolio organically, acquiring one asset at a time to over $2.5 billion of current assets under management. Targeting income-producing, opportunistic and value-add opportunities in New York, Chicago, San Francisco, Miami and other gateway cities, the firm employs a focused and disciplined approach to its investments. For more information, please visit the firm’s website at mcapny.com.
About PGIM Real Estate
PGIM Real Estate is the real estate investment business of PGIM, the global investment management businesses of Prudential Financial, Inc. (NYSE: PRU). Redefining the real estate investing landscape since 1970, PGIM Real Estate has professionals in 18 cities in the Americas, Europe and Asia Pacific with deep local knowledge and expertise, and gross assets under management of $69.2 billion ($49.5 billion net) as of June 30, 2018. PGIM Real Estate’s tenured team offers to its global client base a broad range of real estate equity, debt and securities investment strategies that span the risk/return spectrum. For more information, visit pgimrealestate.com.
About PGIM Real Estate Finance
PGIM Real Estate Finance, the commercial mortgage business of PGIM, is an international full-service, commercial and multifamily mortgage finance business with $93.6 billion in assets under management and administration as of March 31, 2018. Leveraging a 140-year history of real estate finance, the company offers one of the most comprehensive lines of real estate finance products and originates loans for Fannie Mae DUS®, Freddie Mac and specialized affordable housing programs; FHA; Prudential’s general account; and other institutional investors. For more information, please visit pgimref.com.
About Lubert-Adler
Founded by Ira Lubert and Dean Adler in 1997, Lubert-Adler is a Real Estate Private Equity firm primarily focused on creating a diversified portfolio of cash flowing rental assets by combining opportunistic acquisitions with value-added execution. Lubert-Adler has raised a series of Real Estate Funds totaling over $8 billion of equity and approximately $25 billion of assets throughout North America as of June 2018. Major investors include college and university endowments and corporate and public pension funds in the United States. For more information, visitlubertadler.com.
