Seven of 10 largest Manhattan office deals this year are recaps

New York /
Sep.September 12, 2011 10:26 AM

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From left: Broadway Partners CEO Scott Lawler, 280 Park Avenue and 450 West 33rd Street

Recapitalizations are driving the Manhattan commercial real estate market as investors try to better position debt of properties acquired during the boom. Crain’s reported that one-third of all commercial transactions by dollar volume, and seven of the 10 largest office transactions, were recaps. In total, $5.4 billion worth of recapitalizations have occurred thus far in 2011, compared to $2.6 billion in all of 2010.

Two of the largest such transactions involved properties Broadway Partners acquired during the boom, Crain’s noted. In April, Brookfield Office Properties took responsibility for $517 million worth of Debt Broadway Partners had at 450 West 33rd Street, a 1.6 million-square-foot Office Building Broadway Properties bought in 2007, and earned a majority stake in the property. One month later, SL Green Realty and Vornado Realty Trust combined their $400 million of debt position, and infused an extra $150 million, to reposition the 1.2 million square foot office building at 280 Park Avenue, which Broadway Partners bought for $1.2 billion in 2007.

Other big recaps have transpired at 230 Park Avenue, 1515 Broadway, 1633 Broadway and 11 Madison Avenue.

In addition to investors, Crain’s reported that banks are increasingly willing to take losses by selling off loans below their face values — sometimes by as much as 50 percent, according to HKS Capital Partners President Jerry Swartz. [Crain’s]


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