Daol Asset Management Acquires 285 Madison Avenue
Daol Asset Management, a prominent manager of debt funds in South Korea, has officially assumed control of the 25-story prewar office building located at 285 Madison Avenue. This property was previously owned by Aby Rosen and Michael Fuchs of RFR Holding.
Background on the Acquisition
The acquisition comes in the wake of a foreclosure process initiated last December, attributed to a default on a $222 million commercial mortgage-backed securities (CMBS) loan. Daol Asset Management had previously provided two mezzanine loans, summing up to $205 million, associated with the property.
RFR’s Decision Not to Bid
During the recent UCC auction for 285 Madison Avenue, RFR opted not to submit a bid. A spokesperson for the firm stated, “After a decade of ownership and great stewardship of 285 Madison Avenue, RFR elected not to bid on the property given its write-down of the property value driven by today’s capital markets environment.”
Investment History and Recent Challenges
RFR made a significant investment of $190 million in 2012 for the property and successfully refinanced it for $475 million in 2018, following a series of creative redevelopment and leasing efforts that significantly enhanced its value. However, the firm has faced numerous challenges over the past year, with at least five notable loans entering special servicing or undergoing foreclosure.
Furthermore, in January, RFR was evicted from the Chrysler Building after a ruling from the New York State Supreme Court determined that its ground lease with Cooper Union had been terminated. Cooper Union subsequently took over the iconic structure.
RFR’s Resilience and Future Plans
Despite these obstacles, RFR has been proactive in recapitalizing several key assets, including 475 Fifth Avenue and 17 State Street. Recent sales have also included prominent properties such as the Jaffa Hotel in Tel Aviv, the W Hotel South Beach in Miami Beach, and 980 Madison Avenue on Manhattan’s Upper East Side.
A spokesperson for RFR summarized, “As we continue to focus on key projects across our 100-property portfolio, our priority is centered on creating value and delivering an exceptional experience for our tenants. We remain excited to pursue new investment opportunities during this dynamic phase of the market cycle.”
Conclusion
The acquisition of 285 Madison Avenue by Daol Asset Management marks a significant shift in ownership in the New York real estate market. As RFR navigates through its recent financial challenges, the focus on value creation and strategic investments will be crucial for their future endeavors.
For further inquiries, Amanda Schiavo can be reached at as******@****************er.com.
