Michael Wainstein of Private Capital Group, Rabbi Shmuel Butman, New York City Comptroller John Liu and developer Kent Swig

Embattled developer Kent Swig recently told The Real Deal that he hasn’t lost as much gelt as everyone thinks. Sheffield57 was actually “the best, most successful deal I have ever done in my life,” he said. When will Swig spin the dreidel next? Read “Swig: I was the fall guy” in the December issue to be enlightened.

At left, Swig poses after lighting the world’s largest menorah last week in Central Park, near the Plaza Hotel. The Real Deal’s own Michael Stoler lit the Central Park menorah Monday. TRD

Kent Swig and Sheffield57

The luxury condos at Sheffield57 are back on the market at an average of 25 percent off their boom-time asking prices, according to the Wall Street Journal. The 57-story former rental tower at 322 West 57th Street, purchased for a record $418 million in 2005 by a group of investors led by embattled developer Kent Swig, is now widely considered one of the most troubled condo conversions in New York City history. In a foreclosure auction last year, Swig lost the project to Fortress Investment Group, which has since brought in new managers and put the condos back up for sale at an average of $1,500 per square foot. Swig’s group had been asking $2,100 per square foot for the homes at their initial sales launch. [WSJ] 

[more]

Liz Macklowe and Kent Swig

Following persistent speculation surrounding Kent Swig’s purported marital troubles, the embattled developer and his wife have filed for divorce, according to the Post. Swig, whose Sheffield57 is widely considered one of the biggest condo conversion failures in New York City history, has reportedly been banned from the Park Avenue co-op unit he and soon-to-be-ex Liz Macklowe, daughter of developer Harry Macklowe, shared. Macklowe has also listed a $6.9 million East End property — with Sotheby’s International Realty, rather than Swig-connected Brown Harris Stevens.

From the March issue: As developers of struggling new condos grow more desperate for cash, some may be pilfering funds from their own projects, industry insiders say. The reserve fund — a sort of rainy day fund for capital improvements at condo conversions — is particularly vulnerable because developers have easy access to it, experts said. Former Sheffield57 developer Kent Swig and Rector Square’s Yair Levy are the most high-profile examples of sponsors who’ve been accused of depleting these funds. But attorneys and other sources say many more developers are likely misappropriating funds, using residents’ money to pay their bills and falsely inflating costs. [more]

Kent Swig

Kent Swig, the real estate developer whose Sheffield57 is considered one of the most troubled condo conversion efforts in New York City history, is rushing to form a real estate investment trust as a means of paying back the $50 million he owes lenders, according to Crain’s. The plan, which has reportedly been in the works for months, would involve grouping together a collection of Swig’s properties in the REIT, doling out shares to investors and then taking the REIT public. The only hitch, however, is that all of Swig’s creditors and lenders have to agree on the plan before it can be enacted — and the lenders are reportedly growing tired of the ongoing negotiations.
[more]

March is off to a rough start for developer Kent Swig, whose $75 million loan backing Art Deco office conversion 80 Broad Street was transferred to a special servicer because of “imminent default” on Friday. Swig purchased the skyscraper, which was originally designed for the New York Maritime Exchange, in 2004, and according to his Swig Equities Web site, he was turning it into a “luxury boutique office building.” The hitch at 80 Broad is just the latest in a string of personal and financial woes for the San Francisco real estate heir. He is already ensnared in several lawsuits with lenders after defaulting on millions worth of mortgage and mezzanine loans related to his Sheffield57 conversion, and earlier this week, rumors surfaced that he was splitting with his wife of more than two decades, Liz Macklowe, daughter of developer Harry Macklowe. In January he was hit with lawsuits over allegedly unpaid bills on his would-be new offices at 770 Lexington Avenue. [WSJ]

Developer Kent Swig has been named in another batch of lawsuits, according to the Observer, from TPG Architecture and M.D. Mechanical Contractors, for $98,500.39 and $109,364, respectively. Both suits, which were filed in late January, but came to light today, allege unpaid bills for work on his would-be new offices at 770 Lexington Avenue. This news comes on the heels of a rumored rift between Swig and his wife, Liz Macklowe, daughter of developer Harry Macklowe. Swig, whose fiscal problems came to a head through the tumultuous Sheffield57 conversion, defaulted on millions of dollars worth of mortgage and mezzanine loans relating to that project.

Liz Macklowe and Kent Swig

Rumors are swirling that Kent Swig and Liz Macklowe’s decades-long romance may be over. Both Swig, who comes from a famed San Francisco real estate family, and Macklowe, the daughter of billionaire developer Harry Macklowe, married in 1987, had always been real estate royalty. But Swig’s financial woes put a strain on the marriage, friends of the couple told the Post. Swig, whose Sheffield57 condo-conversion was sold in a fire sale and who has faced a string of lawsuits from lenders, is reportedly moving out of the 740 Park Avenue duplex he shares with Macklowe and their children, and looking for a new bachelor pad. Swig’s trouble began when lender Lehman Brothers collapsed, and last September, he came close to filing for personal bankruptcy with $32.4 million in loans that he couldn’t cover. [Post]
[more]

Adam Rose of Rose Associates and Sheffield57

Six months after the building was auctioned off in a fire sale, the New York State Attorney General’s office has approved an amended offering plan for the Sheffield57 condominium near Columbus Circle in a move that could lead to a resumption of sales for the first time since May 2009. Sales at the tower at 322 West 57th Street have languished for months, after former developer Kent Swig defaulted on millions of dollars in mortgage and mezzanine loans and failed to provide an updated plan with state regulators. The building’s current owner, Fortress Investment Group, has been working with Rose Associates, the building’s recently named management firm, to complete renovations at the building so sales could resume. “The Sheffield is moving steadily towards resolution and ultimately being a success,” Adam Rose, co-president of Rose Associates, told The Real Deal. Fortress acquired Sheffield57 for $20 million, plus the assumption of debt, in a so-called mezzanine auction in August 2009. [more]

The year 2009 was a trying time to be a real estate broker, developer or investor, but it never lacked for news. In the aftermath of the financial crisis, the industry watched in awe — and sometimes horror — as residential sales ground to a virtual halt, condo projects stopped in their tracks, office rents shrank and retail stores disappeared. Buyers at buildings like 22 Renwick sued to get out of their contracts, and some were granted the opportunity to back out of their contracts. Meanwhile, an amazing cast of characters — from Kent Swig to Harry Macklowe to Lev Leviev — publicly fought for survival. There were also glimmers of hope, from the opening of the High Line in June to the expansion of Halstead Property into Connecticut to the sale of Former Lehman Brothers CEO Dick Fuld’s sale 16-room co-op apartment at 640 Park Avenue for $25.87 million, almost $5 million more than he bought it for two years ago. Click here to see The Real Deal staff’s picks for the stories that most altered the New York City real estate landscape in 2009. [more]