Howard Michaels in his office at 560 Lexington Avenue last month.From the October issue: Thirty-four years ago, Howard Michaels was knocking on doors in the 2.3 million-square-foot Starrett-Lehigh office building, hawking copy machines for the 3M Company.

“I was making bupkis,” Michaels recalled.

Those days are undoubtedly over. In 2004, he arranged a $219 million recapitalization of that same building, earning a seven-figure commission for his company, a real estate investment advisory firm known as the Carlton Group.

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Clockwise from top left: Eastdil Secured’s Adam Spies, the Helmsley Building at 230 Park Avenue, Eastdil Secured’s Doug Harmon, Howard Michaels of the Carlton Group and Anthony Westreich of Monday Properties

From the August issue: For the owners of distressed properties, it’s a harrowing ride to stabilization. Note sale, foreclosure, bankruptcy or recapitalization, there is no easy path from financial trouble to stable footing. And while some savvy investors have seized control of valuable New York City properties, many owners and lenders have lost billions of dollars through distressed real estate sales and restructurings since the financial crisis began.
This month The Real Deal examines five deals and how they unfolded.
In the second part of the series, Monday Properties held onto a stake in the iconic Midtown tower at 230 Park Avenue but took a large hit to its equity share in the property. At the same time, other former owners such as one of Goldman Sachs’ Whitehall Street funds, bowed out entirely when Invesco Institutional and a Korean pension fund bought a 95 percent interest in the building. Click here to read the story. [more]

Carlton’s Howard Michaels

Howard Michaels‘ Carlton Group has reached the number one spot among New York City office investment sales brokerages for the first time thanks to demand for recapitalizations, the New York Post reported.

Carlton ranked number six nationally for the first half of the year based on $1.1 billion in total volume of debt and equity financings. Eastdil Secured came in at number one with over $4 billion.

Carlton’s New York figures are due to three local recaps valued at $1.1 billion — at 1 Park Avenue, 1180 Sixth Avenue and 450 West 33rd Street, according to the Post.

“Typically, recaps haven’t been recognized as investment sales, but they’re the exact same art,” Michaels said. With $850 billion in commercial mortgages due to mature by the end of the year, according to CoStar Group, Michaels anticipates even more demand for recaps, “due to the widening out of spreads in the CMBS market, which is lowering loan levels, and the sluggish economy.” [more]

Developer Harry Macklowe closed this afternoon on the $70 million acquisition of a 34-unit rental apartment building at 150 East 72nd Street that his Macklowe
Properties expects to convert to condominiums.

Macklowe financed the Lenox Hill purchase and anticipated rehabilitation of the
72,000-square-foot, pre-war building through a total of $120 million in equity
and debt, according to a statement from Macklowe’s exclusive advisor on the
transaction, Howard Michaels, chairman of investment banking firm Carlton
Group. [more]

Manhattan-based real estate investment bank the Carlton Group is expanding into Europe in an effort to become a bigger player overseas, according to Crain’s. The expansion has already begun with the firm opening a London office in April. Howard Michaels, chairman and chief executive, says Russia will be next, potentially opening by the end of 2011. Michaels is attempting to cash in on changed attitudes amongst foreign investors. “Everyone always said overseas investors have an increased appetite in Manhattan. Today that has never been more true,” he said. [more]

The prewar office tower at 315 Park Avenue South is up for grabs with owner Craig Nassi seeking either a buyer or a joint venture partner to recapitalize the property for roughly $350 million. According to the Post, Nassi, of BCN Development, has tapped the Carlton Group to market the building, which has a Staples store in the retail portion and is also home to Credit Suisse, at around $1,000 per square foot. [more]

A deal to save Murray Hill Properties’ tower at 1180 Sixth Avenue has been completed.

The property, between 46th and 47th streets, was almost foreclosed upon when the Shorenstein Group, a mezzanine loan holder, bought the equivalent of the B-note for the property and started foreclosure proceedings, Norman Sturner, CEO of Murray Hill Properties told the New York Observer. Thankfully, a mystery Asian investor stepped in to rescue Murray Hill Properties’ prized tower. [more]

From left: 1180 Sixth Ave., Norman Sturner, president of Murray Hill Properties, and Howard Michaels of the Carlton GroupHoward Michaels has saved the day at 1180 Sixth Avenue, bringing in an anonymous Chinese investor to bail out the owners before a planned foreclosure auction by mezzanine debt holder Shorenstein Properties, according to the Post. Norman Sturner’s Murray Hill Properties and the Carlyle Group had defaulted on their mortgage payments in January after buying the 23-story property, between 46th and 47th streets, for $300 million at the height of the market. Shorenstein filed to foreclose late last month. [more]

1 Park Avenue and, from top, Scott Rechler of RXR and Norman Sturner of Murray Hill Properties (building photo source: PropertyShark)

Vornado Realty Trust spent a total of $180 million to recapitalize and gain control of the 925,000-square-foot office building 1 Park Avenue from Norman Sturner’s Murray Hill Properties, which was in danger of losing the property to lenders.

The cash infusion included about $30 million in tenant improvement costs and other reserves, while at the same time Vornado secured $250 million in debt from a major investment bank, a person familiar with the deal, which closed last night, said. Murray Hill retained a small portion of the equity on the 20-story building located between 32nd and 33rd streets, the source said.

The original capital stack was comprised of a $375 million first mortgage, $100 million in mezzanine debt held by three companies and $120 million in equity. [more]

1180 Sixth Avenue and Norman Sturner, president of Murray Hill PropertiesShorenstein Properties is foreclosing on its mezzanine debt at 1180 Sixth Avenue after owners Murray Hill Properties and the Carlyle Group defaulted on their mortgage payments last month, Crain’s reported. The joint venture purchased the 23-story property, between 46th and 47th streets, for $300 million in 2007, but ran into financial trouble there after the market crashed. As a result, Murray Hill Properties had recently hired the Carlton Group to help it hold onto the 400,000-square-foot tower, with chairman Howard Michaels reportedly hunting for another $245 million. [more]