IF THESE WALLS COULD TALK: The lips are sealed

If the walls of Manhattan’s Lipstick Building could talk, they might be subpoenaed. The 17th floor of the iconic New York skyscraper at 885 Third Avenue, named for its elliptical shape and red granite and steel façade, housed notorious fraudster Bernie Madoff before his 2008 arrest.

After Madoff’s downfall and his firm’s subsequent vacancy from three floors of the 34-story building, the office tower fell victim to the same economic ailment as its Midtown peers. Post-recession vacancies pushed one of the building’s owners into chapter 11 before an Argentine private equity company restructured the financing. The complicated joint venture that owned the building since 2007 defaulted on a $210 million loan from the Royal Bank of Canada in 2010, forcing Metropolitan Real Estate Investors – one of the partners in the JV – to file for bankruptcy. IRSA Inversiones, an Argentine private equity company, stepped in to invest.

But, even before the global financial crisis and the Madoff scandal, the office’s history is more dizzying than the variety of lip shades sold at Sephora. The property was owned and operated for decades by Fosterlane Management before it was sold in 2004 for $235 million to a joint venture between New York-based developer and fund manager Tishman Speyer and the New York City Employees’ Retirement System. A year later, the groups sold a 49 percent stake to TMW Real Estate, a German subsidiary of Prudential Real Estate Investors.

In 2007, the property flipped for $607 million to a joint venture made up of Israeli investment firms Tao Tsuot and Financial Levers, Metropolitan Real Estate Investors, and Marciano Investment Group. From that 2007 buy, the four-way joint venture split the land and the building, holding onto the structure and immediately selling the land for $317 million to another joint venture between real estate investment trusts SL Green and Gramercy. The former REIT absorbed the latter in 2010.

Though in 2011 the Lipstick Building’s path gets more twisted: David Muenzer, a receptionist at one of the tenants, the law firm Latham & Watkins, opened a conceptual art exhibition in two of the buildings vacant floors called “14 & 15”.

In the 32,000-square-foot ghost town of abandoned office cubicles, complete with motivational posters, name plates and white boards, work day plans artists such as Rebecca Lieb filled an office with dirt.

The space had been abruptly vacated by Morgan Stanley in 2008 and the leftover relics of the bank’s occupancy were used as the basis for the exhibit. Trisha Baga hung a trophy around the neck of a potted tree. Muenzer himself stuffed the mail room with letters dyed with food coloring. Craig Kalpakjian placed a looped video of an endless hallway at the end of a hallway. Rachel Harrison overturned a cubicle wall and painted it with the name “Julie Taymor.”

Latham & Watkins were said to have readily agreed to the exhibition as the firm controlled the “gallery” space. Besides, renovations were already planned for the two floors when the exhibit was conceived and were to begin immediately after the exhibit closed.

Fast forward to 2015, a new joint venture has taken over the Lipstick Building’s land in a heated New York office market. SL Green recently announced it sold the land for $453 million to a joint venture comprised of Shanghai Municipal and a partnership between real estate operator Ceruzzi Investments and Starwood Capital Group, according to data site Real Capital Analytics.

So seven years after being in the headlines when the Bernie Madoff scandal broke, exposing the largest Ponzi scheme in history which saw Madoff defraud clients of more than $50 billion, the building houses a mix of finance, real estate and law offices. Earlier this year, investment firm StepStone Group moved into Madoff’s former space on the 17th floor.

The property’s new owners and tenants will hope the Lipstick Building no longer fits the New York Times’ unflattering moniker of the place “where wealth went to vanish.” Between the latest sale and stable occupancy, it appears wealth – at least for the property’s complicated ownership – is no longer vanishing.