The Real Deal New York

CIM Group buys townhouse at  Drake site

January 05, 2011 11:53AM
By Adam Pincus

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Harry Macklowe and 46 East 57th Street
California private equity firm CIM Group, which paid off lenders to take control of Harry Macklowe’s former Drake Hotel site at Park Avenue and 56th Street for $305 million, has acquired an additional property adjacent to the assemblage.

The CIM Group paid $42.5 million for the 18-foot wide townhouse at 46 East 57th Street, city records filed yesterday show. The California company picked up the five-story, 57th Street property through six separate deeds, with values between $417,057 and $14.2 million, city records show.

The five-story building would modestly widen the frontage Macklowe put together on 57th Street, if it is added to the site.

An outside spokesperson for CIM Group declined to comment, other than to confirm the sale price.

Woody Heller, an executive managing director with commercial firm Studley, advised CIM Group on the sale. He declined to comment on the transaction.

Macklowe bought the Drake Hotel at 434 Park Avenue in 2006 for $418 million and the next year tore it down with plans to rebuild a hotel, residential and commercial development. He acquired four of the seven properties along 57th Street to give the site frontage on the high-profile street.

But Macklowe defaulted on the project’s loans, and Deutsche Bank representing a group of lenders filed to foreclose in August 2008. CIM Group took over the site in January 2010, but real estate insiders say Macklowe is still involved in the project today.

According to property records and foreclosure filings, by 2008 Macklowe controlled 38, 40, 44 and 50 East 57th Street, but not 42, 46 and 48 East 57th Street.

This new addition widens access on the street, but property records indicate CIM Group still does not control 42 and 48 East 57th Street, preventing a new development from building a cohesive street wall on the block.

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