Developer Laurence Gluck’s Riverton Houses ordered to be sold at foreclosure auction

Harlem’s 63-year-old Riverton Houses will be sold in a public foreclosure auction, following orders from State Supreme Court Justice Richard Braun yesterday. The seven buildings, which lie between 135th and 138th streets, Fifth Avenue and the Harlem River, were purchased by developer Laurence Gluck for $135 million in 2005, at the height of the housing boom. He refinanced the property in 2006, recouping his own $44 million investment plus more with a new, $225 million mortgage and a $25 million loan. Gluck had then planned to make a profit on the 1,228-unit middle-class housing complex by converting most of its rent-stabilized apartments to market-rate rentals. He renovated the buildings and landscaped the property, but when, by 2008, only 10 percent of Riverton apartments had been deregulated, Gluck was left without enough rental income to cover debt payments. In 2009, he defaulted on the mortgage and offered to hand in the keys to Riverton in a deed in lieu of foreclosure. The property, recently appraised at just $108 million, has $240.6 million in debt. The foreclosure sale is expected to take place in March, and several groups have already expressed interest in buying Riverton, which is still managed by Gluck. [NYT]