The Real Deal New York

Dreier home sells at auction for $8.2M

July 21, 2009 06:11PM
By C. J. Hughes

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alternate textFrom left: Marc Dreier’s home at 1 Beacon Place was auctioned at N.Y. Bankruptcy Court today

Until last week, Marc Dreier, the high-profile lawyer accused of swindling hedge funds and individuals out of $400 million, was living in a glassy Midtown apartment with views of the Queensboro Bridge.

Now, Dreier’s headed to prison, after receiving a sentence of 20 years on July 13, and somebody else is moving into his old digs.

This afternoon, at the court-ordered auction of the property, a buyer identified only as “bidder No. 288” walked away with the four-bedroom condo for $8.2 million.

No. 288, who asked to remain anonymous, outbid 45 other people at U.S. Bankruptcy Court for the Southern District of New York to win the four-bedroom, five-bath unit, which has 3,000 square feet, plus a 738-square-foot east-facing terrace that can be accessed from the master bedroom and living room.

The unit, 34C, is located at 151 East 58th Street, otherwise known as One Beacon Court, which was designed by Cesar Pelli, and whose lower floors contain the offices of Bloomberg L.P. and Le Cirque restaurant.

At today’s auction, where would-be bidders had to show up with a $500,000 certified check just to get in the door, the bidding began at $3 million. Though the bidding lasted only about five minutes, the back-and-forth grew heated at times, as No. 288 went head to head with No. 286, who also declined to give his name.  

Indeed, No. 288 seemed to have a lock on the home with his $8.1 million bid, before No. 286 upped it to $8.15, before the winning bid was submitted in front of a standing-room-only crowd of about 90 people in the blue-carpeted room.  

“Right now, I have buyer’s remorse,” joked No. 288 afterwards, as he signed the document, promising that he would present the balance of his 10 percent down payment, or $320,000, by Thursday. He has until Aug. 28 to close on the property, according to court officials.

Also included in the sale is all the furniture and electronics in the apartment, which has a state-of-the-art touch-panel system to control lights, and even some packs of cigars in a dresser drawer, according to those who have visited the apartment in advance of the auction. One bedroom has been converted to a media room with a flat-screen TV and couch, they noted.

Yet one large wall-mounted glass sculpture by Dale Chihuly, part of Dreier’s estimated nearly $30 million art collection, will be sold separately, according to Salvatore LaMonica, the court-appointed trustee who is helping oversee the distribution of funds to Dreier’s victims. U.S. District Judge Jed Rakoff, who sentenced Dreier, ordered him to pay $387.7 million in restitution.
 
In fact, proceeds from the sale of his apartment will be split between victims of his scams and creditors in a separate but related Chapter 7 bankruptcy case involving Dreier LLP, his former 250-attorney law firm. A third case, involving Dreier’s personal bankruptcy, will not benefit from today’s sale.

“I think we achieved maximum value,” LaMonica said after the auction, adding that the sale price was higher than he expected.

The auctioneer, meanwhile, was David R. Maltz & Co., of Plainview, N.Y., which also handled the auction of Dreier’s Hamptons properties in June. Those homes, in Quogue, a village of Southampton on the East End of Long Island, sold for $6.6 million and $3.8 million, said vice president Richard Maltz.

“We thought it went very well. It was extremely spirited bidding,” he said.

Dreier, who has degrees from Harvard and Yale universities, pleaded guilty May 11 to a handful of fraud and money laundering charges. Among his scams were selling phony promissory notes for real estate projects from developer Sheldon Solow, who was one of Dreier’s clients.

After the auction, some bidders muttered about how quickly the price had escalated on a unit they thought was worth about $6 million.

But Patricia Vance, a Prudential Douglas Elliman broker who currently has a listing at One Beacon Court, says $8.2 million is actually a fair price. Dreier paid $10.425 million for it in 2007, and assuming a 25 percent drop in prices since the market’s peak, $8.2 million is actually better than what the market would support, she explains.

Still, the Dreier apartment’s per-square-foot price of $2,700 is below the $3,500 price units in the building are currently asking, according to Streeteasy.com.

“I think it was a good price for everyone,” Vance says. “The building should be happy, and whomever will end up getting the money should be happy, and the buyer should be happy, too.” TRD

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