Catholic Church Sells Madison Ave. Land For $490M To Pay Abuse Victims
The Archdiocese of New York is selling a Manhattan ground lease to fund a settlement for victims of sexual abuse by clergy.
The archdiocese leases the site at 455 Madison Ave. to Korean hospitality company Lotte Hotels for the Lotte New York Palace. Lotte has agreed to pay the archdiocese $490M to take over the ground lease and unite ownership of the land and building, according to a petition filed in state court Thursday.
“Our goal has been to provide the maximum amount of compensation to the maximum number of victims,” a representative for the archdiocese said in a statement. “The sale of this land is our latest effort to generate funds that can be used for that purpose.”
The operator has owned the 909-room hotel at the corner of Madison Avenue and 50th Street, which has served as the backdrop for television shows including Gossip Girl and 30 Rock, since it acquired the property in 2015, according to Condé Nast.
“The acquisition of the land beneath Lotte New York Palace marks a pivotal milestone in advancing our global business and elevating our brand value,” a Lotte spokesperson said in a statement. “With this solidified foundation, we are committed to establishing Lotte as a leading global hotel brand.”
The ground lease sale still requires approval from the New York state Supreme Court because of the Archdiocese’s status as a nonprofit. Nearly half of the sale price, $200M, is going toward settlement payments, according to Commercial Observer, which first reported the deal.
The remainder will go toward paying off loans that the church borrowed to fund previous settlements under the 2016 Independent Reconciliation and Compensation Program and the Child Victims Act case settlements.
CBRE brokered the deal between the Korean operator and the Church, PincusCo reported. Lotte didn’t immediately respond to a request for comment.
The land underneath 455 Madison is the most significant remaining asset in the archdiocese’s real estate portfolio, according to a spokesperson. Once the deal closes, the local branch of the Roman Catholic Church will have sold more than $860M of Manhattan real estate since 2023.
The archdiocese also raised $103M when it sold 1011 First Ave., its former HQ, to Vanbarton Group this summer. The new owner is converting the 20-story office building into a 26-story, 420-unit apartment tower.
The two sales combined have generated $300M to go toward the global settlement, according to a Dec. 8 note Cardinal Timothy Dolan, leader of the Archdiocese of New York, shared with parishioners.
The Catholic Church also netted $48M with the sale of 331-341 W. 25th St. to Timber Equities at the start of the year, as well as somewhere between $58M and $68M for the 2024 sale of 181 Avenue D to a joint venture between Spatial Equity and Community Access, CO reported.
It also sold more than 500K SF of air rights over St. Patrick's Cathedral to Ken Griffin, Vornado Realty Trust and Rudin in 2023 for as much as $164M. The trio is using the air rights on Park Avenue, planning a new office skyscraper.
UPDATE, DEC. 12, 4:50 P.M. ET: This story has been updated to include comment from a representative for Lotte Hotels.
