Mike Bloomberg Rescues RFR’s 980 Madison Avenue After Buying it for $560M

With Aby Rosen's RFR Holding facing billions in maturing debt, the developer has secured a significant financial boost from a former New York City mayor.

Bloomberg’s Acquisition

A shell company associated with Michael Bloomberg has purchased the office building at 980 Madison Avenue for $560 million. The deal was revealed through a deed filed on Thursday. The buyer, 980 Madison Avenue Holdings LLC, is linked to wealth management attorney David McCabe. According to PincusCo, Bloomberg Philanthropies, which leased most of the building last year, is the actual buyer.

Bloomberg’s Statement to Tenants

In a letter to tenants obtained by PincusCo, Bloomberg expressed his commitment to the neighborhood and the building, stating, “I have recently purchased the building.” He assured tenants that the ownership change would not significantly affect their occupancy.

Impact on Tenants and Property Valuation

The 134,000-square-foot building, a recognized art institution on the Upper East Side, previously housed several galleries. Bloomberg Philanthropies’ long-term lease for over 85% of the space led to other tenants vacating as their leases expired. Notably, the Gagosian Gallery, occupying more than 40% of the building, will see its lease expire in April 2025.

Financial Details and Market Implications

A $172.6 million CMBS loan backed the property, and its sale is expected to fully repay the bondholders on this securitized debt. The building's 2021 appraisal valued it at $350 million, making Bloomberg’s $4,152 per square foot purchase price remarkable, especially given the decline in office property values over the past three years.

Timely Financial Relief for RFR

This substantial transaction provides timely financial relief for RFR, managed by Aby Rosen and Michael Fuchs, as they face $2.5 billion in loans maturing within the next year.