Risanamento S.p.A. has announced the important investment in the prestigious buildings market from Broadway 660 Madison Fee LLC relative to a 23-story building located at 660 Madison Avenue, New York City, in the Plaza District, for $375 million (c. €276.6m). The asset, home of Barney's the prestigious department store, measures about 24,000 m², for a purchase price of about €11,600 per m².
660 Madison Avenue in New York.
660 Madison Avenue is the first commercial building coming from the Upper East Side, one of the most exclusive residential areas in Manhattan, and features extremely rare characteristics for New York City buildings such as undisputed Central Park views and wide terraces. The location and the high quality of the asset has made it one of the prime and most prestigious addresses for financial boutique firms in New York City. 660 Madison's tenants are predominately private equity and hedge funds such as Colony Capital, Lexington Partners, Gleacher Partners and Drake Partners, but also includes the prestigious fashion company Dolce & Gabbana. On account of all of these elements, 660 Madison Avenue has historically commanded among the highest rents per square foot in New York City.
This investment consistently follows the strategy of Risanamento, already implemented in Paris, to invest in prime, quality, highly prestigious real estate assets in exclusive locations characterized by a strong and steady demand but limited availability. These distinguishing features command a very favourable rent price dynamics. In particular New York, and even more so, the Plaza District, is a quality market where the rent price growth rate in the last two years has been one of the highest in the world, even higher than Paris'.
The asset has been purchased through a non-recourse financing of $275 million provided by Deutsche Bank. The Risanamento investment represents the first employment of the significant amount of liquidity obtained by the issuance of the convertible bond this past May, by the refinancing of a portion of the Paris real estate portfolio made at the beginning of this past August and by the proceeds derived from the expected sales of non strategic real estate assets belonging to the Risanamento trading portfolio.
The building will be managed by Fisher Brothers, a blue chip real estate company with an unrivalled long-term record of ownership and operating success, among the most respected in New York and in the United States, with whom Risanamento has developed a strong relationship.
Risanamento was represented by the New York office of Paul Hastings, a leading international law firm with over 1,200 attorneys in 18 offices.