The Real Deal New York

Harry Macklowe and 46 East 57th Street, which CIM Group acquired last month
The owners of two townhouses in the middle of the massive building site near the former Drake Hotel are refusing to sell despite years of prodding by hopeful developers, according to the Post.

The townhouses, at 42 and 48 East 57th Street, are being eyed by CIM Group, which has assembled a large, mixed-use parcel between Park and Madison avenues, mostly through its acquisition of the former Drake hotel site from Harry Macklowe’s creditors, after he defaulted in 2008.

In addition to the hotel site on East 56th Street, the CIM-Macklowe assemblage includes buildings at 38, 40, 44, 46 and 50 East 57th Street, all of which the California-based private equity firm, which kept Macklowe on as a development adviser, wants to raze. (As The Real Deal reported, CIM acquired No. 46 for $42.5 million last month).

But both Nos. 42, which shirtmaker Turnbull & Asser bought for $32.5 million in 2008, and 48, in which high-end watchmaker Jacob & Co. resides, are putting a snag in the plans. Turnbull’s location is a larger issue for CIM — it’s right in the middle of what is supposed to ultimately become a 57th Street retail façade for the project — whereas if Jacob stayed put, it would simply mean the project would have 101 feet of sidewalk frontage, rather than 150 feet.

But with demolitions planned on both sides of 42 East 57th Street (a permit just went up at No. 40, and No. 44 is already cloaked in plywood), CIM appears to be stepping up its negotiating game. CIM has already offered to move Turnbull to its townhouse on the edge of the site, at No. 50, but no deal has been struck yet. [Post]