The Real Deal New York

MSD Capital pays $63M for stake in Grand Central Terminal

The stake was held by Lehman Brothers

July 27, 2016 06:04PM
By Kathryn Brenzel

Grand Central (inset: Michael Dell)

Grand Central (inset: Michael Dell)

Michael Dell’s MSD Capital has purchased a stake in Grand Central Terminal for $63 million amid a bitter battle over the station’s air rights.

Lehman Brothers Holdings, which sold the ownership interest, was part of a group of investors that bought the terminal in 2006 for $76.5 million, court documents show. The group of investors is headed by Andrew Penson, who is currently engaged in a bitter battle with SL Green Realty TRData LogoTINY over air rights at the terminal.

The specifics of the stake were not included in records filed with the city on Wednesday. Representatives for Lehman, which is the defunct bank’s U.S. arm, and Penson did not immediately return calls for comment. Lehman filed for bankruptcy in 2008, and then moved to sell off some $639 billion in assets.

A filing in Penson’s lawsuit over air rights at the terminal indicates that Lehman — or, LBGC LLC — is one of three LLCs that make up Midtown TDR Ventures LLC, one of the companies that own Grand Central. The documents filed on Wednesday do not indicate if the air rights are involved in the sale.

Penson filed a lawsuit against SL Green and the city late last year. Penson claimed that by rezoning a five block stretch that included the developer’s One Vanderbilt, the city rendered his air rights over Grand Central worthless. He estimates that the air rights are worth $1.1 billion.

MSD is headed by the Michael Dell, the one-time boy wonder who founded the computer company that bears his name. MSD Partners, an investment advisory firm led by principals of MSD Capital, has other real estate interests in New York. The company holds a slice of a $174 million senior loan that is helping to finance Sharif El-Gamal’s 45 Park Place, a luxury condominium in Tribeca.

A representative for MSD declined to comment.

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