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Amazon Buys Troubled Midtown Manhattan Asset from RFR

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RFR escapes foreclosure with the timely sale of the nearly 600,000-square-foot 522 Fifth Ave. The post Amazon Buys Troubled Midtown Manhattan Asset from RFR appeared first on Commercial Property Executive.

Exterior shot of the office building at 522 Fifth Ave. in Midtown Manhattan — RFR acquired 522 Fifth Ave. in 2020, for $350 million. *Image courtesy of CommercialEdge*

Amazon has bought a struggling Midtown Manhattan office property from RFR Realty, several news outlets reported Friday. The purchase price for the 23-story, 595,430-square-foot building at 522 Fifth Ave. has not been disclosed. The building is vacant and had been in foreclosure.

SL Green is reported to have bought the property’s debt at a large discount, for just $134 million, after the property entered foreclosure last June.

An SL Green spokesperson told Commercial Property Executive that the company “previously held a mortgage loan investment position in the office condo at 522 Fifth Ave. The loan has been satisfied, and SL Green no longer holds an ownership position in the asset.”

RFR could not be reached for comment, and Amazon did not reply to CPE’s request for additional information.

The Class B property came online in 1896 as a hotel. It then got converted into office in 1919, CommercialEdge data shows. It was substantially expanded in 1961, after which it was renovated in 1997 and 2007. Amazon’s New York headquarters is close by, at 424 Fifth Ave.

RFR acquired the building from Morgan Stanley in September 2020 for $350 million, using a $224 million funding package consisting of a $55.5 million variable-rate loan from SL Green Realty and a $168.5 million interest-only CMBS loan, according to CommercialEdge information. Both loans were set to mature in March 2024.

Opposite extremes

Barely two weeks ago, RFR surrendered its ownership of 285 Madison Ave. to its mezzanine lender, a consortium of large South Korean insurance companies. The UCC foreclosure of the 511,000-square-foot office tower near Grand Central Terminal was led by Ocean West Capital Partners.

Amazon has been in a happier situation with respect to real estate recently. In its metro Seattle home turf, the e-commerce giant is proceeding with its Bellevue 600 project in the eponymous submarket. The development’s two towers will total more than 1.5 million square feet of office space when they deliver later this year.

The post Amazon Buys Troubled Midtown Manhattan Asset from RFR appeared first on Commercial Property Executive.