Lender sues to force Lipstick Building sale

The Royal Bank of Canada has sued to force a sale of the Lipstick Building at 885 Third Avenue, the 34-story office tower that served as the backdrop for Bernie Madoff’s $65 billion Ponzi scheme, according to Bloomberg news. Haim Revah’s Israel-based Metropolitan Real Estate Investors, which purchased the property for $648.5 million from Tishman Speyer in 2007, defaulted on a $210 million loan from Toronto-based Royal Bank. Revah’s group also has a $60 million loan from Goldman Sachs and pays $11 million per year in rent to SL Green and Gramercy Capital for the ground beneath the tower. Revah has been facing shortfalls in rent revenue this year — in part because of the 16,000-square-foot trading floor still vacant after Madoff’s departure. Royal Bank is now seeking a court-appointed receiver to oversee the property and to arrange a sale. [Bloomberg]