Lehman Brothers Holdings matched Equity Residential’s $1.33 billion bid for a 26.5 percent stake in Archstone, and then sued partners Bank of America and Barclays for breaching Lehman’s right of first refusal for the stake in a sale, Bloomberg News reported.

Archstone is a real estate investment trust with stakes in 60,000 U.S. apartment units and 14,000 units in Germany, that Lehman purchased in October 2007 with Tishman Speyer for $22 billion. Lehmar eventually filed for the biggest bankruptcy in U.S. history and refinanced the portfolio and brought in equity partners Barclays and BofA, which combined for a 53 percent stake. [more]

Lehman Brothers has sold its 90-plus percent stake in the former International Toy Center at 200 Fifth Avenue to JPMorgan Chase, in a deal that values the building at $700 million, according to the Wall Street Journal. Lehman had reportedly been shopping the building at the corner of 23rd Street that it bought for $480 million in 2007 through Eastdil Secured’s Adam Spies and Doug Harmon. At one point it appeared the failed investment bank would lose millions on the building as it struggled through vacancies in 2009. But an expensive interior upgrade and improving market helped lure tenants like Eataly and Tiffany & Co. to the building, instantly raising the building’s profile. It’s unclear whether the costly revamp sucked all potential profit from the trade. [more]

The Lehman Brothers Holdings estate is looking to unload its 90 percent equity stake in the former International Toy Center building at 200 Fifth Avenue, the Wall Street Journal reported. The bank bought the 800,000-square-foot property in partnership with L&L Holding for $480 million in May 2007, after which its value plunged to below the value of the $390 million mortgage. But with the Manhattan office market on the rebound, and several big-name tenants — including Eataly and Tiffany & Co. — now in place, the property is again worth more than the debt, and Lehman, which has been holding on to many of its real estate assets on the assumption that the market will eventually improve, is now ready to sell. [more]

Left: One Mad. Park, Trump Soho, William Beaver House, Dan Fasulo of Real Capital Analytics

Fitch Ratings downgraded and issued a dire warning about iStar Financial, saying the Manhattan-based commercial lender would need to negotiate significant concessions from bondholders to avoid a [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]

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A major hotel real estate investment trust and subsidiary of Lehman
Brothers Holdings has filed for bankruptcy protection in New York,
after buckling under $1.42 billion in debt, according to the Wall
Street Journal. Innkeepers USA Trust currently owns more than 70 hotels
across 19 states, many of which ran under widely known brand names like
Marriott, Hyatt and Hilton. The Palm Beach, Fla.-based REIT aims to
eliminate around $700 million worth of debt through the bankruptcy,
experts say. The news comes on the heels of a rocky relationship with
one of its brands, Marriott, which threatened to remove its name from
23 hotels in the REIT due to a perceived lack of upkeep. Innkeepers and
Marriott ultimately struck a deal on June 25. [WSJ]

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The former Toy Building at 1107 Broadway and developer Yitzchak Tessler (building photo source: PropertyShark)

Developer Yitzchak Tessler is facing multiple challenges in his effort
to hold on to the condominium conversion project at the former Toy
Building at 1107 Broadway overlooking Madison Square Park. The
bankrupt lender Lehman Brothers Holdings sued Tessler and his company
1107 Broadway LLC yesterday to foreclose on a $136.8 million senior
loan. [more]

Click chart for larger version (source: Prudential Douglas Elliman)

Cozy beach cottages are so 2001. Over the past decade, East End homes have gotten bigger, more elaborate and more expensive, according to a 10-year market report released today by Prudential Douglas Elliman. In 2009, the average sales price of a home in the Hamptons was $1.52 million, up 152 percent from $607,014 in 2000. The median sales price jumped 124 percent to $825,000 from $367,250 in 2000, the report shows. The increase reflects the addition of larger homes to the housing stock, said appraiser Jonathan Miller, president and CEO of Miller Samuel and the preparer of the report. (For a story on the East End residential market in the fourth quarter, click here.) “People were seeking larger homes in the country on larger pieces of property, and that became the new image of the Hamptons,” Miller said. Judi Desiderio, CEO of East End brokerage Town & Country Real Estate, said she began to notice the shift towards larger homes in the Hamptons around eight years ago. “Ten years ago, they weren’t buying McMansions,” she said. “They were buying a reasonable home, maybe around 3,000 square feet, which they could enjoy with their family and friends. Then all of a sudden, people started to build bigger. Bigger was better.” [more]