The Real Deal New York

Prudential’s Margolis exits Manhattan House to lead Apthorp conversion

March 12, 2008 04:37PM
By David Jones

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Prudential Douglas Elliman broker Howard Margolis, the point man on the controversial Manhattan House condominium conversion, has ended his tenure there to focus on his other major project, the conversion of the landmark Apthorp complex on the Upper West Side.
 
Sources familiar with the move said Margolis, executive vice president and director of sales, was re-assigned from Manhattan House after a series of discussions involving Prudential vice chairman Dolly Lenz and Brian Fallon, a partner at O’Connor Capital Partners, which owns the 583-apartment complex.

Prudential and Margolis insist the change was expected.

“This was always the plan,” Lenz told The Real Deal.
 
Prudential officials have been under significant pressure to move new apartment sales at the 200 East 66th Street building, as lender HSH Nordbank’s June 1 deadline looms to convert 15 percent of existing units.

That pressure had nothing to do with Margolis’ re-assignment, he said.

“I really only planned on staying at Manhattan House for a year and I stayed a little longer than I really wanted to,” Margolis told The Real Deal.

After settling a long-standing legal battle with former partner Richard Kalikow, owner O’Connor entered a $750 million loan agreement with Nordbank to finance the conversion. Kalikow and developer Jeremiah O’Connor bought Manhattan House in 2005 for a record $623 million, which was the single biggest acquisition price for a residential building. Their falling out is detailed in this month’s issue of The Real Deal.

According to a legally-required posting in the Manhattan House lobby earlier this week, Prudential has sold 55 units at the building, including seven to current tenants. Lenz said that as of Wednesday, there are 62 fully executed contracts and 28 additional contracts pending.

“We’re doing incredibly well,” said Lenz, who said that average sales prices are more than $1,500 per square foot and a penthouse apartment has sold for more than $2,500 per square foot.

Lenz confirmed that Fallon, the O’Connor Capital partner, has moved into the building and has agreed to buy one of the larger units. That will likely raise eyebrows in the building, where tenants have accused the developer of harassing tenants in order to speed the renovation of existing apartments.

Margolis said he will now focus on another controversial conversion: the landmark Apthorp apartment complex at 390 West End Avenue.

“We expect obviously to market the building to a pretty high-end audience,” Margolis said.

Margolis said he is also working on one additional conversion and a new residential development, but declined to name the projects. 

Developer Maurice Mann and Israeli billionaire Lev Leviev bought the Apthorp in 2006 for $425 million. They plan to convert the 163-unit building into condos by September.

Along with Nordbank’s deadline, the Manhattan House also faces a June 30 deadline issued by state Attorney General Andrew Cuomo’s office. Fifteen percent of the units must be converted in order for the conversion plan to become affective and close existing condo sales.

 

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