11 Madison Avenue

Credit Suisse, which currently lease approximately 3 million square feet in Manhattan, is looking to downsize. According to the Wall Street Journal, the Swiss bank recently contacted a select set of landlords and developers, including  Related, Silverstein Properties and Brookfield Office Properties, seeking interest and proposals to build or lease a new home for the company. However, Credit Suisse’s lease at Madison Square Park’s 11 Madison Avenue runs through 2017 and the building’s ownership is currently working to secure a renewal from the bank. … [more]

From left: Credit Suisse CEO Brady Dougan, AG Eric Schneiderman

Credit Suisse is the latest financial institution targeted in the government investigation into alleged wrongdoing in the sale of residential mortgage-backed securities. New York Attorney General Eric Schneiderman filed a lawsuit today claiming the banking giant misled investors about the quality of the home loans packaged into nearly $94 billion of RMBS.

The action, filed in New York State Supreme Court, claims that Credit Suisse told investors it carefully assessed the loans and loan originators but, in reality, “systematically failed to adequately evaluate these loans, and kept investors in the dark about the adequacy of their review procedures.” [more]

New York Attorney General Eric Schneiderman

U.S. federal and state authorities have launched a probe investigating Credit Suisse AG’s repackaging and sale of mortgage-backed securities, Reuters reported. Analysts have blamed the sale of mortgage-backed securities for inflating the housing market; that, they said, led to a bubble that subsequently popped, causing the implosion of firms such as Lehman Brothers and Bear Stearns.

The bank under fire, Switzerland’s second-largest, declined to provide comment on the investigation, which sources told Reuters was being conducted by the U.S. Justice Department and the New York state Attorney General. [more]

Madison Square Park

Credit Suisse has issued a request for proposals for nearly 3 million square feet of office space it intends to lease when its current space is up, in 2017, a source told the Wall Street Journal.

The Swiss financial services firm currently leases three spaces — all near Madison Square Park —  at 11 Madison Avenue, 1 Madison Avenue and 315 Park Avenue South, the Journal said. Although Credit Suisse has long been represented by CBRE, it is looking to undergo a complete review of its office spaces in New York City, and possibly consolidate them in one building, the Journal said. [more]

Wall Street

As new types of businesses increasingly descend upon Wall Street, the old guard is beginning to depart. According to the New York Times, many financial institutions are moving middle-tier workers out of the Financial District to cheaper office space around the country.

With taxes, labor costs and real estate expenses so high in New York, more companies have begun “near-shoring” workers, or moving them outside of financial centers but keeping them in the U.S. While low-level jobs have already moved off-shore and top-tier traders and bankers will be in the city for the foreseeable future, accountants, human resource employees and legal support, to name a few, are being moved to places like North Carolina and Jacksonville, Fla. [more]

The boutique City Club Hotel at 55 West 44th Street is set to double its room count after securing $36 million in new loans from Starwood Property Trust, according to the Wall Street Journal. City Club’s owners, led by hoteliers Stephen Brighenti, Jeffrey Klein and Russell Hernandez, will use up to $13 million of the financing to build 66 rooms on top of the existing 65.
“Our best-case scenario is that in six to eight months we’ll have [city] approval to proceed,” Brighenti said . “Whereas the original rooms are more traditional, these will be more open and loft-like. Half of the new rooms will have balcony terraces.”… [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]

JPMorgan Chase has been subpoenaed by the U.S. Securities and Exchange Commission over mortgages issued before the real estate collapse that have since soured, Bloomberg News reported. The move comes amid an SEC probe into the mortgage practices of several U.S. banks, including Credit Suisse, which was subpoenaed last week. The JPMorgan subpoena is seeking information related to Bear Stearns mortgage practices, after bond insurers alleged that the bank, which JPMorgan acquired in 2008, had demanded refunds from originators but then failed to share those refunds with sellers. … [more]

Home insurer Allstate has sued Bank of America’s Merrill Lynch unit over claims it fraudulently sold the insurer about $167 million of residential mortgage-backed securities, Crain’s reported. In a complaint filed yesterday in New York Supreme Court, Allstate asked for damages, including the lost market value of the securities and principal and interest payments. “Because of the systemic abandonment of underwriting standards and the resulting inclusion of toxic, highly risky mortgage loans to back the certificates, most of Allstate’s certificates have been downgraded from the highest possible ratings to junk-bond ratings,” Allstate said in the complaint…. [more]

Mary Ann Tighe and 4 East 72nd Street (building photo credit: CityRealty)Aaron Tighe, the son of CB RIchard Ellis CEO and Real Estate Board of New York Chair Mary Ann Tighe, has just nabbed a four-bedroom, four-and-a-half-bathroom apartment at the tony 4 East 72nd Street for $5.83 million, according to the New York Observer. Aaron, a managing director at Credit Suisse, landed the co-op at a steep discount — the apartment was first listed in May 2009 by Sotheby’s International Realty brokers Meredith Smyth and Serena Boardman for $7.75 million. The apartment, sold by John Bartlett Coleman, best known for his development of the Ritz-Carlton hotel on Central Park South, was later listed by Key-Ventures broker A. Laurance Kaiser…. [more]