Let’s say you own a 60-year-old, 900,000-square-foot office building in Midtown. Demand for office space in midcentury buildings is weak. You have a half-billion-dollar mortgage payment coming up.
Do you:
Do you need to rush to refinance your financing if lenders get cold feet?
Complain to the New York Times that this is the worst season for property owners since the Flood?
If you’re Germany’s Munich Re, the world’s largest reinsurance company, you do neither. You simply dip into petty cash and pay off the $500 million Wells Fargo loan in full – as it just did at 330 Madison Ave. at East 42nd Street, sources told us.
The 850,000-square-foot tower across from One Vanderbilt is proof that buildings don’t have to be brand new to be successful. Its office floors are 98 percent leased and its retail spaces are leased to Citibank, Santander and Swedish luxury men’s shirt maker Eton.
“It is virtually unheard of these days for an owner to repay such a large loan, but Munich Re does not want to have any debt on any of its buildings,” said one source. “When they took out the loan, they had every intention of repaying it.”
The tower, which is managed by Munich Re’s asset management subsidiary MEAG, is the company’s “flagship entry” into the Manhattan real estate market, a source said.
Since Munich Re bought the building for $900 million in 2020, just before the pandemic, the company has signed new office leases for 260,000 square meters. Rents, which were between $60 and $70 per square meter three years ago, are now over $100 per square meter, the sources said.
The largest tenant is hedge fund and asset manager Guggenheim, which owns the Los Angeles Dodgers, with 275,000 square feet. Other notable tenants include real estate brokerage JLL, Deutsche Bank AG, HSBC and Maverick Real Estate Partners, which moved from 100 Park Ave. to 10,000 square feet at 330 Madison earlier this year.
The landlord has made significant investments in the property and is in the process of creating a tenant-only terrace on the 16th floor that includes an outdoor event space with a wraparound patio, a full-service bar and lounge seating. Additionally, 330 Madison sits above an entrance to the 7 train’s Grand Central Station stop.
