Milstein Seeks Debt to Renovate NY Offices
The owner of an office building next to Manhattan’s Grand Central Terminal is in the market for $750 million of debt as it repositions the property to attract technology companies.
Milstein Properties is conducting a substantial renovation of the 1.1 million-square-foot building at 335 Madison Avenue, including the conversion of several floors into a hub for tech startups. It’s in the market for a floating-rate loan that would run three years and have a couple of one-year extension options. JLL is showing the assignment to a variety of lenders.
Some of the proceeds would retire existing debt. Bank of China originated a $498 million mortgage in 2013. The current balance is unknown.
New York-based Milstein is run by developer Howard Milstein, who also is chief executive of Emigrant Bank. His son, Michael Milstein, helped form a technology-business incubator a few years ago called Grand Central Tech, which occupies about 100,000 sf at 335 Madison. Recently rebranded as Company, the operation is expanding to 350,000 sf, creating a “virtual tech campus” on floors 3-7 that would host up to 200 startups and early-stage businesses.
Meanwhile, an ongoing renovation project is outfitting the building with advanced fiber-optic communications systems and state-of-the-art security. Some 150,000 sf of amenity space is being added, with a pool, a fitness center, bars and restaurants, and a terrace overlooking Grand Central Terminal. The improvements will position the building as airy, modern office space, much of it designed for smaller tenants in shared spaces similar to the WeWork office model. Other portions of the building would house larger corporate tenants.
The 29-story building was developed in 1913 as the Biltmore Hotel. It was converted to offices in 1984. The building later took the name of Bank of America when it leased a large chunk of space. The Milstein family has owned the property for decades.
The building occupies the entire block bounded by Madison and Vanderbilt Avenues and East 43rd and East 44th Streets. It’s adjacent to the 1.6 million-sf One Vanderbilt office skyscraper that’s currently being developed by SL Green.