The State Teachers Retirement System of Ohio (STRS) is selling a big stake in 590 Madison Avenue, the 1 million square foot New York City skyscraper owned by the pension fund.
The fund will sell a 49 percent stake in the property.
From The Real Deal:
The State Teachers Retirement System of Ohio has put a 49 percent stake in 590 Madison Avenue on the market. The building, which was originally developed as IBM’s headquarters, could fetch as much as $1.5 billion, according to Crain’s.
Ohio STRS will still keep a majority interest in the 43-story, 1 million-square-foot tower. The property on the corner of East 57th Street and Madison Avenue includes a large public plaza.
By selling a stake, the pension fund can capitalize on New York City’s rising real estate prices, according to Crain’s, while still keeping control of an asset that continues to bring in cash. IBM is the building’s largest tenant and occupies 120,000 square feet.
A STRS spokesman talked to Crain’s New York about the decision:
“It is a situation where we would be looking to gauge interest in selling a portion of the building, but we want to retain control,” Mr. Treneff said. Mr. Treneff said that selling a stake would allow the pension fund to capitalize on the city’s soaring real estate prices while still holding onto the majority of what has been a very profitable investment that produces strong cash flow and will likely continue to appreciate.
The skyscraper’s notable tenants include Bain Capital, Morgan Stanley, IBM, Bank of America and Citigroup.
Photo by Sarath Kuchi via Flickr CC License