Related closes on purchase of Rector Square

New York /
Jan.January 21, 2011 05:06 PM
From left: Rector Square, YL Real Estate Developers’ Yair Levy and Justin Metz, a managing principal with Related Companies

[Updated: 11:53 a.m., Jan. 24, 2011] Related Cos. today closed the long-anticipated acquisition of Rector Square, the Battery Park City condominium that was foreclosed on by Anglo Irish Bank, for $82.8 million, The Real Deal has learned.

Anglo Irish bought the unsold shares of the condo at a November auction of the 304-unit building at 225 Rector Place for the same amount of money, and sold the property to Related, which had been managing the property for nearly one-and-a-half years after the lender filed to foreclose on former developer Yair Levy.

“Rector Square is an asset that we were very familiar with, having initially developed the property and later served as managing agent for the receiver,” said Justin Metz, managing principal at Related. “We look forward to bringing new resources to the development and maximizing value for both our partners and existing owners.”

Sources familiar with the case say that an ongoing controversy exists over whether Related will have to replenish Rector Square’s depleted reserve fund of at least $6 million.

“While we cannot comment on the ongoing litigation, Attorney General Schneiderman will not tolerate fraud against tenants and homebuyers and is seeking a full recovery from the previous developer for his misconduct,” said Lauren Passalacqua, Schneiderman’s spokesperson.

She confirmed that Related will have to file a new amendment with the AG if it plans to resume sales. Sources say the amendment will have to disclose any material changes at the property, for example, details of the sale and what changes Related plans for the property.

The sale ends one of the biggest condo foreclosures in the history of New York. Former state Attorney General Andrew Cuomo halted sales at Rector Square in 2009 after construction was halted at the 304-unit property and the lender called in a default on the mortgage.

As The Real Deal originally reported, Anglo Irish Bank foreclosed on the building after the conversion project unraveled in late 2008. Anglo Irish sued Levy for defaulting on nearly $200 million in mortgage loans, taxes and pilot payments to Battery Park City authority and allegedly spending millions of dollars from the building’s reserve fund.

Unit owners have since filed a $100 million fraud suit against Levy and others involved in the conversion, alleging widespread fraud.

“The unit owners will happily work together with Related to bring the building up to par as a first-class, luxury condo,” said attorney Marc Held, who represented about 46 unit owners in the building. “Related is a fine organization that delivers a first-class product. Unit owners are hopeful this is what they are going to do at 225 Rector within compliance of the offering plan and declaration.”

Lawyers for Anglo Irish and attorneys for Levy were not immediately available for comment.


Related Articles

arrow_forward_ios
Governor Andrew Cuomo and Senator James Skoufis (Credit: Getty Images, NY Senate)
Owners of some residential properties can’t hide behind LLCs anymore
Owners of some residential properties can’t hide behind LLCs anymore
Related's Jamar Adams and Steve Ross with 14-06 Gateway Boulevard (Credit: Getty Images and Google Maps)
Related is the latest developer to target the Rockaways
Related is the latest developer to target the Rockaways
Governor Andrew Cuomo and 538 Johnson Avenue in Brooklyn (Credit: Google Maps and Getty Images)
Landlords take another hit: Cuomo signs expanded Loft Law
Landlords take another hit: Cuomo signs expanded Loft Law
Related's Stephen Ross and the Chelsea-Elliott Houses (Getty, Wikimedia)
Related wades into NYCHA — and becomes a target
Related wades into NYCHA — and becomes a target
Governor Kathy Hochul (Getty)
Hochul downsizes Cuomo’s Penn Station plan
Hochul downsizes Cuomo’s Penn Station plan
Eliot Spitzer, Stephen Ross, 506 and 152 West 36th Street and 511 West 35th Street (Google Maps, Related Group, IMDB)
Related Companies nabs land from Spitzer Enterprises for $77M
Related Companies nabs land from Spitzer Enterprises for $77M
Top loans: Related Companies exits Margaritaville, digs in at Truffles Tribeca
Top loans: Related exits Margaritaville, digs in at Truffles Tribeca
Top loans: Related exits Margaritaville, digs in at Truffles Tribeca
Will 10 new towers pay for Penn Station?
MTA chair: 10 new towers may not fund Penn Station expansion
MTA chair: 10 new towers may not fund Penn Station expansion
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...