Putting Back the Pieces of Ownership: The Madison Building

How would a consolidation of the three ownership interests of a prestigious Manhattan office building unlock value?
Lynne Sagalyn  | Spring 2011
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The Madison Building is a prestigious office building in midtown Manhattan. The ownership of the Madison Building is sliced into a fee position and two different leaseholds. The separate ownership positions receive differing income streams. These unaligned structural mechanisms do not produce the best outcomes for the overall value of the building or for the individual ownership entities…and also make it near impossible to secure conventional financing that could produce the necessary capital for revenue-enhancing improvements. This case asks students to analyze the quantitative and qualitative elements of the current ownership structure, including the abstracts of the lease agreement and cash flow analyses, to recommend a more advantageous ownership structure for the building.

Case ID: 111702
Supplemental Materials: Teaching Note

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