By Linda O’FLanagan

Crown Acquisitions and investment firm Highgate have bought the trophy glass tower at 650 Madison for $1.3 billion.
The 27-story glass and steel building was sold by the Carlyle Group, who bought it with Ashkenazy Acuisitions for $680 million in 2008.
“We had a strong conviction in the underlying value of this property when we acquired it during the Great Recession, and we are pleased to capitalize on the success of our active repositioning and leasing plan,” said Carlyle managing director Andrew Chung.
The buyers believe they just bagged a bargain.
Speaking on behalf of the partnership, Stanley Chera, founding principal of Crown, said, “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.”
Added Haim Chera, principal of Crown, “Carlyle has been successful in acquiring assets with good underlying potential and transforming them into iconic properties, as was the case with the billion-dollar sale last year of the retail condominium at 666 Fifth Avenue, in which we were a partner.
“Together, 650 Madison Avenue and 666 Fifth Avenue represent two of the best investments of the post-financial crisis era.”
Indeed, experts predict the bumper price is a sign of things to come in the New York trophy investment sales arena.
With several assets now being traded at greater than $2,000 per square foot, Carlton Group chairman Howard Michaels said Manhattan trophy real estate remains “cheap by international standards.”
He said his firm sees a “highly liquid market” with money coming into New York from Canada, Europe, the Middle East, China and other major countries around the globe.
Key factors in the pricing uptick include higher cap rates, higher-than-average rent growth and low office vacancy.
Encompassing the entire westerly block-front on Madison Avenue between 59th and 60th Streets, 650 Madison has three distinct components: a 425,000 s/f Class A office tower; a 100,000 s/f custom medical-office space; and 75,000 s/f of dominant world-class retail, with 200 feet of Madison Avenue frontage.
Earlier this year, ownership completed a capital improvement program that created a bespoke lobby, marquis canopy, glass curtain wall entrance, and new elevators and common areas, all designed by Moed de Armas & Shannon Architects.
Carlyle has completed more than 400,000 s/f of leases at 650 Madison Avenue since acquiring the property. Currently 92% leased, 650 Madison serves as the international corporate headquarters for Ralph Lauren Corp., which leases 276,829 s/f of the space, and has major retail tenants including Crate & Barrel and luxury designer Tod’s in its Madison Avenue frontage.
Adam Spies and Douglas Harmon of Eastdil Secured acted as exclusive broker in the transaction.