A lender has finally wrested 285 Madison Avenue from Aby Rosen’s hands.
Daol Asset Management, a Korean investment firm that doled out $200 million in mezzanine debt on the Midtown tower, took the asset at auction yesterday after Rosen and Michael Fuchs’s RFR declined to bid on the deal, The Promote first reported.
The firm stayed on the sidelines because the deal had been devalued by “today’s capital market environment,” a spokesperson told the publication.
285 Madison, which stands a few blocks from Grand Central, was reappraised at $300 million last summer — effectively half of its 2017 value.
Daol may hold the keys to 285 Madison, but it wasn’t the first lender to make a grab for them.
Late last year, the bondholders on a $219 million CMBS loan slapped the firm with a pre-foreclosure filing after its second default of 2024.
Ahead of a May maturity, RFR told its lender it would be unable to pay off the loan when matured, according to Morningstar Credit. It managed to nab a six-month extension, but when the new maturity dawned, it was in the exact same spot — overleveraged in a relatively high-rate environment.
The firm requested yet another extension; the bondholders instead moved to foreclose.
A little over a month later, Daol made its play for the asset, filing a UCC foreclosure on RFR’s ownership interest in the property. The move allowed the mezz lender to skip the line.
UCC foreclosures, by nature, move months faster than judicial foreclosures in New York State — what the bondholders filed. Case in point: It took Daol a little over two months to take the keys.
It’s not surprising that two lenders were vying for ownership. 285 Madison is in good shape, especially for an older office tower. It’s 96 percent leased and pulling nearly three times as much revenue as expenses, according to Morningstar.
Critically, though, those expenses do not account for debt service, which has crippled the building.
All told, RFR had $419 million in debt on the deal. It’s been underwater since November 2022, when it was first reappraised for $411 million — a 30 percent cut from its 2017 value.
This article originally appeared on The Real Deal. Click here to read the full story.