Continuing a whirlwind acquisition spree, RXR Realty is buying 237 Park Avenue for around $800 million, Crain’s reported. In partnership with Walton Street Capital, RXR scooped up the 21-story, 1.2 million-square-foot building, located between East 46th and East 47th Streets, from Lehman Brothers Holdings, which had previously foreclosed on the troubled asset and recovered it from Broadway Partners. Scott Rechler, RXR’s chief executive, told Crain’s that he would invest several million dollars to renovate the building. “It is consistent with what we’ve been looking for,” Rechler said. “It’s a good building with good bones that we can acquire at a large discount to what it would cost to replace the asset.”… [more]

From left: Jeffery Fitt, Lehman’s New York-based head of real estate, On the Avenue Hotel and 237 Park Avenue

Over-leveraged real estate assets caused its demise, but in an ironic twist, Lehman Brothers is now leveraging its property holdings into repaying many of those debts. Following its acquisition of Archstone, the failed bank was the largest buyer of U.S. commercial property by value last year. Since its collapse, Lehman has acquired an additional $5 billion worth of real estate assets. [more]

From left: 230 Park Avenue and 237 Park Avenue (credits: PropertyShark)

Just two weeks after L&L Holdings requested proposals for Park Avenue’s first new office tower in three decades, speculation is growing that a second new tower could rise on the avenue. According to the New York Post, now that Lehman Brothers Holdings has full control over 237 Park Avenue it is considering building a new tower on the property, near 45th Street. [more]

From left: Adam Hochfelder, 230 Park Avenue, 237 Park Avenue and 450 West 33rd Street

Adam Hochfelder, the real estate executive who pleaded
guilty earlier this year to defrauding investors, relatives and lenders out of more than $18
million, was sentenced to a minimum of two years, eight months and a maximum of eight year… [more]

Lehman Brothers Holdings, brought down in part by its huge property investments, is reinvesting in some of its existing deals on a bet that commercial property markets are bottoming out, the Wall Street Journal reported. Since the investment bank’s collapse in September 2008, Alvarez & Marsal — the firm overseeing Lehman’s bankruptcy — has reinvested more than $1 billion in apartments, office buildings and other commercial property around the country already owned or financed by Lehman and facing varying levels of distress. One of those properties is a 21-story office building at 237 Park Avenue. In 2007, Lehman originated $1.23 billion in loans to finance the purchase of the tower by Broadway Partners, retaining $437 million of the debt on its own books. Lehman also has spent nearly $1 billion to pay off partners and creditors and reach other settlements that resulted in the return of real estate assets to the firm. By investing more money into these deals, Alvarez & Marsal is hoping to salvage the maximum amount from the $14.4 billion of commercial real estate on the bank’s books. However, the success of this strategy depends in many cases on property values rising, something that is far from certain, given the tumultuous real estate market and the country’s weak economic recovery. [WSJ]

… [more]

The struggling publishing industry is the latest to fall victim to the city’s tireless bedbug population,
which has been taking hold of the news cycle in recent weeks with
outbreaks in clothing stores, hospitals and offices (not to mention apartment buildings).
Hachette Book Group, whose offices are at 237 Park Avenue, has been
treating its three floors for bedbugs this week. The offices were open
until this afternoon, when they closed for the final round of
treatment. A company spokesperson told the Wall Street Journal that
doors would reopen Monday. Other recent bedbug-related closures include
a triage room at Kings County Hospital in Brooklyn, the offices of Euro RSCG Worldwide downtown, an east side Victoria’s Secret, an Abercrombie & Fitch at the South Street Seaport and the Hollister Epic store in Soho. [WSJ]

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Lehman Brothers Holdings has asked for permission in bankruptcy court to invest $255 million in Broadway Partners’ 237 Park Avenue, the 21-story office tower in which the liquidating bank already has a $437 million investment. Lehman loaned Broadway $1.23 billion to buy the property in 2007 and began negotiating a possible restructuring in August 2009, when it believed Broadway was in danger of imminent default on part of that loan. In a court filing today, Lehman said Broadway Partners is now selling part of its debt and that an additional investment by the failed bank “represents the best means of protecting [LBHI's] current investment…which could be potentially wiped out if a party other than LHBI buys the debt.” [Bloomberg]

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COO Jonathan Yormak has left Broadway Partners, the New York Observer
reported. Yormak, who had worked at Broadway since 2003, reportedly
told CEO Scott Lawlor that he would leave once he finished overseeing
the company’s short-term debt workouts on a number of buildings,
including 237 Park Avenue and 100 Wall Street. Yormak told the Observer
that he retains some residual interests in the company but is leaving
“to pursue some opportunities in a new platform.”… [more]