Real Estate

Madoff Office for Lease; Offers River View and Stigma


Behind unmarked doors on the 17th floor of a red granite high-rise known as the Lipstick Building, FBI agents still labor to unravel a case like no other.

Offices of Bernard L. Madoff Investment Securities LLC, New York

The agents —already there for more than six months—say the chore is so daunting, they need to stay in the Manhattan skyscraper at least another year.

And by the way: They intend to hang on to the copy machine.

The former headquarters of Bernard Madoff are a home away from home for the FBI and, as of July 1, a leasing opportunity for any potential tenant who can stomach its status as ground zero of the largest securities swindle in history.

"Some people may see a stigma associated with it," building manager Russell Freeman said on a recent tour of the piece of the three-floor firm that's been put on the market. "But he's out of there. His bad karma has gone with him. ... Space is space."

Space once used by Madoff himself -- a fishbowl corner office with partial views of the East River -- has been emptied of most furniture and paperwork, like the rest of the 19th floor. Only a pair of built-in cabinets and a wall-mounted television, easily 10 years old, remain.

Across the room is a matching corner office where Madoff's brother Peter worked. Two smaller glass offices were for Madoff sons Andrew and Mark. Two filing cabinet drawers still bear stickers with Andy Madoff's name.

The three men, whose names remain on an automated directory in the building lobby, oversaw a trading floor for Bernard L. Madoff Investment Securities that's now a ghost town, dead silent except for the hiss of an air conditioner.

The color theme throughout -- from the refrigerator in a galley kitchen to the trading floor desks to the many conference rooms -- is the minimalist black and ash gray favored by the 71-year-old former Nasdaq chairman, one of the original tenants when the building opened in the mid-1980s.

Floors 17 through 19 became part of a crime scene later last year when the once-prominent money manager confessed that his secretive investment advisory group actually was a massive Ponzi scheme that wiped out thousands of investors. He was sentenced to 150 years in prison last month and on Thursday decided not to appeal the sentence.

The disgraced financier has claimed he alone conned clients by recycling their money to create phantom wealth. But investigators have said they suspect members of Madoff insiders were involved and have been camped out on the 17th floor searching for evidence of a wider conspiracy.

Many of the records were paper or on microfilm and date back decades. Authorities say the firm relied on an old IBM computer to churn out statements that were fictitious.

When the scandal broke, news crews and burned investors flocked to the 34-story skyscraper -- shaped like an open lipstick tube -- to measure the financial wreckage. They didn't get far: Madoff's firm had been sealed off from the public by an army of FBI agents, federal regulators and a trustee appointed to liquidate the business assets.

Since then, the trustee has sold one of Madoff's legitimate trading operations to a new broker-dealer firm that took over the 18th floor. A staircase connecting the 18th and 19th floors will be removed, Freeman said.

As for the 17th floor, trustee Irving Picard wrote in court papers that the FBI "has advised me that they will require access to the space until, at least, approximately July of 2010." It also wanted to continue using a leased Xerox copying machine there. The cost will be covered by an industry group that compensates victims of securities fraud.

Sharing the 17th floor in separate office space is a discount brokerage headed by Wall Street veteran Muriel Siebert, the first woman to buy a seat on the New York Stock Exchange in 1967 and the only tenant allowed a dog. Siebert had a sublet with Madoff and is now paying rent to the trustee.

What remains is the 16,182-square-foot 19th floor. A bankruptcy judge recently authorized the trustee to cancel the Madoff lease there through 2012 with landlord Metropolitan Real Estate Investors, creating the vacancy in a sagging commerical real estate market.

Freeman wouldn't say what Madoff paid in rent, adding that no price has been set for the floor. There have been some feelers, but no firm offers. Any takers who don't remodel, he said, "will certainly have to like dark colors."