Lipstick Building nearing foreclosure?

New York /
Apr.April 22, 2010 02:04 PM

Third Avenue’s iconic Lipstick Building, scene of Bernie Madoff’s $65 billion Ponzi scheme, is nearing foreclosure, according to the Post’s Lois Weiss. Sources said the Royal Bank of Canada has hired Doug Harmon and Adam Spies of Eastdil Secured to market a $210 million mortgage it holds on the 34-story office tower at 885 Third Avenue, which was purchased by Israel-based Metropolitan Real Estate Investors for $648.5 million in 2007. Facing shortfalls in rent revenue — in part because of the 16,000-square-foot trading floor still vacant after Madoff’s departure — the owners have since depleted their loan reserves. Madoff had occupied three floors. One of those is now being paid for by the U.S. government; the other has been rented by Surge Trading, which bought Madoff’s company after the Ponzi scheme unfolded. SL Green is a likely taker for RBC’s loan, because as part of their purchase in 2007, Metropolitan sold 79 percent of the land below the tower to SL Green, Gramercy Capital and a private investor for $317 million. The building owners now pay $11 million per year in rent, which is slated for an increase in 2012. [Post] 


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