510 Madison Avenue
(Updated, August 3) Tishman Speyer may be an investment partner in a new effort by O’Connor Capital Partners to buy out 510 Madison from developer Harry Macklowe, according to court documents obtained by The Real Deal.
Macklowe claims in new state Supreme Court filings that he recently blocked entrance to O’Connor, the junior mezzanine lender at 510 Madison, because the investment firm wanted to bring his archrival, led by Jerry Speyer, to engage in a “predatory” takeover of the office tower.
But a spokesperson for Tishman Speyer said the company is not interested in 510 Madison, although she did not address whether Tishman considered a deal with O’Connor.
Jeremiah O’Connor, the managing partner of O’Connor Capital Partners, filed suit July 23, alleging that Macklowe prevented him from bringing in the new investors into 510 Madison, which he needed to make a counter offer to take over the building.
O’Connor needed those investors to make a bid that would allow him to jump ahead of SL Green, which hoped to foreclose on the building and take it over. O’Connor Capital declined to comment.
SL Green, the city’s biggest commercial landlord, reached a deal in June that would give Macklowe until March 2011 to repay $253 million in defaulted mortgage loans. SL Green previously purchased the loans and planned to foreclose on the property, which would make it the new owner at 510 Madison and wipe out O’Connor’s $69 million mezzanine loan.
“Defendant has been and continues to be willing to grant plaintiff and its agents, representatives and employees access to the premises,” Fried Frank attorney Janice Mac Avoy, who represents Macklowe in the case, said in legal filings. “However, defendant need not, and will not, allow plaintiff to bring unrelated third parties, including representatives of Tishman Speyer, to tour the premises in contemplation of a transaction whereby plaintiff admittedly seeks to obtain equity partners to purchase the senior loan and foreclose on defendant’s interest in the premises.”
Macklowe’s lawyers claim that they told O’Connor six weeks ago that they would not allow O’Connor to share confidential information about the property or bring in a competitor to buy the building out from under them. Macklowe’s lawyers argue that O’Connor cannot syndicate the loan because the loan is underwater, meaning the borrower owes more than what the loan is worth.
As the junior mezzanine lender, O’Connor faces the loss of its loan value if and when SL Green forecloses on the senior debt. SL Green previously acquired the senior mortgage for $170 million and the senior mezzanine loan for $15 million, one of several deals it has made in recent months to acquire distressed office properties in Manhattan.
SL Green officials were not immediately available for comment. Macklowe declined to comment.