As seen in Commercial Observer

BY NICHOLAS RIZZI MARCH 3, 2022

The Sapir Organization put its own Midtown South headquarters on the market, as the company continues to shift its focus to Miami after CEO Alex Sapir decamped to the Sunshine State in 2019, as Commercial Observer has learned.

The Sapir Organization wants to get around $600 million for 260 and 261 Madison Avenue, which offers a combined nearly 1 million square feet of office space, a source with knowledge of the deal said.

The towers — which sit across the street from each other between East 38th and East 39th streets — has been owned by Sapir for more than two decades and are nearly 80 percent leased by tenants that include law firm McLaughlin & Stern, Hanes and Coca-Cola. Sapir has its headquarters at the 28-story 261 Madison.

CBRE’s Darcy Stacom and William Shanahan are marketing the properties. Stacom said she’s pitching the office towers as being in a new submarket, Grand Central South, and will be rebranding the buildings as One and Two Grand Central South.

“For years this area from 40th to 34th streets has just never really had a strong identification, yet it sits between two of the strong submarkets in New York City: Grand Central and Midtown South,” Stacom said. “It really causes people to look at things the way they should.”

Stacom’s newly created submarket also includes 475 Fifth Avenue — which Aby Rosen’s RFR Holding agreed to buy for $290 million recently, and in which tenant Penske Media recently expanded its space to 105,000 square feet — and the former Lord & Taylor headquarters at 424 Fifth Avenue that Amazon bought for $1.15 billion in 202 with plans to open a 2,000-person office in.

“There’s a lot of leases going on around here,” Stacom said.

The Sapir Organization bought the properties in 1997, but has started to shift its focus to Miami in recent years, working on major projects such as the luxury condominium building Arte and the mixed-used development Miami 18, The Real Deal reported. In 2019, The Sapir Organization put its development site at 218 Madison Avenue up for sale for $23 million, according to TRD. That building has not appeared to sell.

A spokesperson for the Sapir Organization referred to CBRE for comment.

The 260 and 261 Madison properties have been caught up in the legal drama between Alex Sapir and his former brother-in-law, Rotem Rosen, with Rosen claiming Sapir is in default at the Madison Avenue towers because they served as collateral to a 2017 agreement between the pair. The case is still ongoing and Sapir argued in court that the properties are not in default.

The Sapir Organization was also one of several landlords to sue coworking giant WeWork — which previously was a tenant at 260-261 Madison — claiming it owes $17 million in damages for ditching the lease, TRD reported. WeWork and ousted co-Founder Adam Neumann later filed their own suits against the Sapir Organization, claiming it properly vacated its lease. Industrious later took over WeWork’s former space.

Nicholas Rizzi can be reached at nrizzi@commercialobserver.com.