From left to right: Kent Swig, Yair Levy, Harry Macklowe and Aby Rosen could be personally liable to lenders.
From the November issue: Contrary to popular belief, commercial lenders did not throw out all of their standards in the recent cycle of easy credit.
When developer Aby Rosen structured his $133 million loan for the
acquisition and development of the Shangri-La hotel at 614 Lexington
Avenue in April 2007, the mortgage document included a personal
guaranty to cover losses in the event of a default. Similarly, when Kent Swig negotiated $49 million in loans with
Lehman Brothers Holdings to develop a hotel and condo project at 45
Broad Street in the Financial District in 2006 and 2007, the bank
demanded a similar guaranty in the mortgage documents.
And other big-time borrowers such as developer Yair Levy and
investor Steven Elghanayan have made the same types of commitments to
convince banks to make loans on their projects.