- Namdar Realty Group bought the leasehold at 71 Fifth Avenue, an 11-story Class B office building in Flatiron, for $62 million, ending a five-year sales effort by Madison Capital and Lubert-Adler.
- Madison agreed to pay nearly $85 million upfront plus $3.5 million in annual rent in 2016, and sources put the 2021 asking price near $150 million.
- The building is mostly leased to firms like WeWork, Adyen and AI startups, with a full 15,000-plus-square-foot floor open, showing demand and price expectations diverging in Manhattan office.
Five years of marketing ended at a steep discount: Namdar Realty Group bought the $62 million leasehold at 71 Fifth Avenue from Madison Capital and Lubert-Adler, according to The Real Deal, which cited Commercial Observer for the price.
Traded first reported the deal, and The Real Deal said it closed last week.
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From $150M to $62M
Madison signed a firm contract in 2016 to buy the fee position, committing roughly $85 million at closing plus $3.5 million a year in rent. When it and Lubert-Adler began marketing the leasehold in 2021, sources told Commercial Observer the price could reach $150 million.
The final price came in at well under half of that. Commercial Observer got no comment from the parties.
A leasehold gives the buyer rights to the building under a long-term ground lease, not ownership of the land. That makes the rent obligation a key part of the pricing.
What Namdar Bought
The 11-story Class B building sits where Flatiron meets Union Square. The lease has roughly 90 years to run. Underneath, the land belongs to Samco Properties and the Lapidus family, led by Mark Lapidus, who was WeWork’s global real estate chief.
Meridian Capital Group brokers Helen Hwang, David Schechtman and Brian Szczapa handled the sale.
Who’s Inside
Tenants include WeWork, Dutch payments company Adyen and AI startup Captions, plus an AI company that has not been named and signed off-market. As we covered in our look at off-market leases, that deal was reported at roughly 30,000 SF, struck before marketing began at rents among the building’s highest.
A full floor of more than 15,000 SF is still available. City National Bank occupies a slice of the street-level retail, and the remainder sits empty.
Another Namdar Discount
This isn’t Namdar’s first Manhattan bargain this year. His company agreed to buy ESRT’s 540,000 SF tower at 250 West 57th for about $280 million, versus the $350 million the REIT had sought earlier in the year. That is about 20% below the ask.
That 26-story tower is 84% leased, with T.J. Maxx anchoring the retail under a lease through 2041.
Why It Matters
Tenant demand and seller expectations are pulling in different directions. The building has landed AI and tech tenants, yet the leasehold still sold at roughly 41% of the 2021 aspiration.
The same gap showed up at ESRT, where activist Erez disclosed a 5.8% stake in the REIT. Buyers with long-dated leases are setting the price.
What’s Next
Watch how Namdar fills the open floor and the vacant ground-floor retail. Leasing those spaces will show whether the discount purchase pays off at current rents.
