It will be lights, camera, action at Sapir Organization’s 260 Madison Avenue after MGM Studios inked a lease at the office tower.
The film and television production giant nabbed a 50,500-square-foot lease at the 22-story Midtown South building. Commercial Observer was first to report on the transaction.
A CBRE team including Peter Turchin and Gregg Rothkin brokered the deal on behalf of Sapir. CBRE declined to comment on the length of the lease, the price per square foot, when the lease takes effect, and what floors MGM will occupy.
MGM was an existing subtenant who opted to sign a direct lease, according to CBRE. The entertainment company’s cable channel Epix is already a tenant in the 570,000-square-foot building.
MGM, which was acquired by Amazon for $8.5 billion earlier this year, will join the likes of clothing company Hanesbrands, investment sales brokerage Marcus and Millichap and law firm McLaughlin & Stern at Sapir’s 260 Madison Avenue. Other notable tenants at the Midtown South office building include coworking firm Regus and online accounting firm 1-800Accountant.
Sapir put 260 Madison Avenue and 261 Madison Avenue, its sister property located across the street, on the market earlier this year. The firm was hoping to get around $600 million for the two buildings as it shifts its investment strategy to Florida. The two buildings were 81 percent leased as of March, down from 92 percent in December 2020, according to Moody’s Investors Service.
Sapir bought the properties in 1997. The company failed to pay off a $231 million CMBS loan for the two buildings before its mid-June maturity date, according to Trepp. The owner entered into a forbearance agreement with the loan’s servicer, allowing additional time to pay off the debt.
MGM’s lease at 260 Madison Avenue comes as Manhattan’s office market appears to be gaining some steam. The borough’s availability rate dropped in the third quarter to 16.4 percent, its lowest level since March 2021, according to a report from Colliers. Tenants leased 9.2 million square feet in the quarter, up 26 percent from the previous quarter and 28 percent from the same period last year.
The return-to-office outlook in New York City may be at its strongest point in recent years. A post-Labor Day surge saw attendance at the city’s office buildings reach pre-pandemic levels in mid-September, according to card-swipe data by Kastle Systems.
That surge appears to have continued into October, as Kastle data show desk visitation in the city rose to 47.8 percent for the week ending Oct. 12.