The Real Deal New York

Toll Brothers pays $35M for bankrupt Gramercy site

June 22, 2011 05:29PM
By Adam Pincus

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From left: 276-280 third avenue,Toll Brothers’ Bob Toll and developers Norman Kaish and Leonard Taub

[Updated 7:00 p.m. with marketing and judgment of loan] Residential developer Toll Brothers won a foreclosure auction held today with a $35.5 million bid for the property at 276-280 Third Avenue at the corner of 22nd Street in the Gramercy Park neighborhood, along with air rights from four other properties.

Toll Brothers plans to build a 21-story apartment building with approximately 80 units, which would include retail space, company spokesperson Christine Sciarrotta said. The developer has not yet decided if the units will be rentals or condominiums.

Developers Norman Kaish and Leonard Taub, under the name Gramercy Park Land, began putting the assemblage together in 2006, and borrowed $30.5 million from UBS Real Estate Investments, city property records show. But the company defaulted on the loan, and UBS pursued a foreclosure. Gramercy Park Land filed for bankruptcy in March 2011.

The total site can support a 105,000-square-foot project, according to an article in March 2011 by Real Estate Alert. A team led by Jonathan Caplan, an executive managing director at commercial brokerage Jones Lang LaSalle, represented UBS in its efforts to market the loan. The loan had a judgment totaling about $46 million, court records showed.

The auction bid comes to a price of $338 per buildable foot.
The court-ordered sale was held in the New York State Supreme Courthouse in Lower Manhattan. There were approximately a half-dozen bidders.

Paolo Zampolli, senior vice president at Prudential Douglas Elliman and a potential buyer of the site, sent a lawyer to the auction to represent him in the bidding, but he was only prepared to bid up to $25 million, he said.

“Gramercy is one of the best places in New York City,” he said. “But the bidding went beyond my range.”

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