510 Madison and Harry Macklowe
O’Connor North America, the junior mezzanine lender at 510 Madison
Avenue, has filed suit to force developer Harry Macklowe to open up the
building to an investment group that will help investor Jeremiah
O’Connor buy out the loan [more]
From left: William Macklowe and Harry MackloweAll is not right in the Macklowe house: William Macklowe and his father, Harry Macklowe, have parted ways — in the business world, at least — according to Crain’s. Sources say that the younger Macklowe has split from Macklowe Properties and has inked a lease for a full floor of office space at 126 East 56th Street, where he will launch his own company. [more]
From the May issue: At first glance, the nearly completed 510 Madison Avenue, designed by the firm of Moed de Armas & Shannon and developed by Macklowe Properties, might look like just another example of the sort of building that already abounds in Midtown Manhattan. This office tower, rising 30 stories from a six-story base, is a structure of glass and steel much like 20 others that have adorned the avenue over the past 50 years. But to the experienced student of architecture, there is a barely definable quality to the building that distinguishes it from its neighbors. The quality that I speak of is quality itself, the sense that the architectural firm involved knew what it was doing, and that it refused to cut corners in its design or in the cost of materials. [more]
A week after fending off a foreclosure action at 510 Madison Avenue, developers Harry and William Macklowe and real estate investment trust SL Green Realty are facing a lawsuit from another industry heavyweight that wants a piece of a $65 million insurance payment.
O’Connor North American Property Partnership, led by Jeremiah O’Connor, filed suit against Macklowe Properties, alleging breach of contract, and SL Green, alleging breach of contract and unjust enrichment for allegedly failing to share the insurance proceeds stemming from the massive 2009 fire at 510 Madison. The 510 Madison building has been embroiled in controversy for years. It was one of the last commercial buildings in the Macklowe Properties portfolio after the developer was forced to sell off the trophy General Motors building in 2008 help pay off billions of dollars in debt. [more]
SL Green has come out with an official announcement of its 600 Lexington Avenue takeover from a joint venture led by Hines US Core Office Fund for $193 million, or $636 per square foot. The price was previously reported at under $180 million. Under the terms of the deal, SL Green will assume $49.85 million of debt on the 36-story office tower, for which the 5.74 percent interest-only loan matures in March 2014. The building is currently 93.6 percent leased, though 54 percent of its space will become available over the next three years. “We moved aggressively to lock up this opportunity, and there exists a strong likelihood that we will be able to attract a joint venture partner on this asset,” said CEO Marc Holliday. The city’s largest landlord has been on somewhat of an acquisition tear lately. The company purchased 100 Church Street at a foreclosure auction earlier this year and recently snatched up the debt on Macklowe Properties’ 510 Madison, on which it is now trying — with some difficulty — to foreclose. TRD [more]
SL Green Realty is going to trial with Macklowe Properties over 510 Madison Avenue. SL Green, which recently purchased the debt on the 30-story tower and also picked up 600 Lexington Avenue from Hines Interests earlier this week, had planned to foreclose and take control next week on the grounds that Macklowe violated the terms of the loan. Macklowe’s lawyers said Harry Macklowe and his son, Billy, were entitled to two six-month extensions. A New York state Supreme Court judge ruled earlier today that the ownership battle will have to be settled in a trial, for which the date remains unclear. The property has only one tenant, investment firm Jay Goldman & Co., which is ensnarled in another legal battle with Macklowe as it tries to back out of the lease. [Crain's]
SL Green is buying Hines Interests’ 600 Lexington Avenue for almost $180 million, or $700 a square foot, sources told Crain’s. The 282,000-square-foot office tower is one of three major city properties of its kind that had been attracting attention from investors while on the market despite the sector’s slump. All three — the others are 340 Madison Avenue and 125 Park Avenue — are being marketed by Darcy Stacom and Bill Shanahan of CB Richard Ellis. The acquisition for the city’s largest landlord follows that of 100 Church Street, which SL Green picked up at a foreclosure auction earlier this year. The company also recently bought the debt on 510 Madison Avenue, on which a foreclosure is scheduled for next week pending a hearing tomorrow. [Crain’s]
Tourneau, the high-end purveyor of watches, is ditching its long-time Penn Station digs. After more than 40 years at the corner of 34th Street and Seventh Avenue, Tourneau representatives said it’s ducking out due to a dispute over lease renewal terms with the landlord, Vornado Realty Trust, although Vornado declined to comment. While Tourneau said its looking for another space in the city, it has yet to decide where. Tourneau currently has a lease at at 510 Madison Avenue, where it’s trying to get out of its contract. [more]
Despite Macklowe Properties’ bid for an extension on a $185 million loan at 510 Madison Avenue, SL Green Realty has plans to begin collection proceedings on the loan March 1, according to Crain’s. SL Green had bought the loans associated with 510 Madison Avenue from Union Labor Insurance toward the end of last year, in what many saw as a move to take over the building. SL Green took a similar strategy at 100 Church Street, the one-time property of the Sapir Organization, which it took over through its role as debt holder last month. While SL Green is remaining mum on the 510 Madison building, Stephen Meister, a Macklowe attorney, said his company will “take prompt legal action” if SL Green doesn’t allow the loan extension. [more]
It has been “a very busy, satisfying seven weeks,” for SL Green Realty, CEO Marc Holliday said in a conference call with investors today to discuss the company’s fourth-quarter earnings results. The company last spoke to investors at its annual conference Dec. 7.
SL Green posted a $5 million loss for the quarter yesterday, down from
a $76 million gain for the fourth quarter of 2008, but Holliday was
nonetheless optimistic about 2010′s prospects.
Strong leasing activity will better-position the city’s office landlords to attract tenants without the generous concessions seen in 2009, he said.
“The general consensus amongst owners is that we’re going to
see concessions tighten up this year,” Holliday said, adding that
security deposits and lease lengths were likely to increase.
The city’s largest landlord saw average starting rents fall by
30 percent to $33.05 per square foot in the fourth quarter, pushed
downward in part by a 227,782-square-foot lease renewal by BMW of
Manhattan at 555 West 57th Street. Starting rents averaged $47.31 per
square foot in the third quarter of 2009. [more]
