25 Broad, 627 Greenwich both return to lenders

TRD New York /
Apr.April 18, 2012 02:58 PM

Despite much anticipation from the real estate community, two large foreclosure auctions taking place today at 60 Center Street drew little excitement. Both properties — 25 Broad Street and 627 Greenwich Street — returned to lenders Lehman Brothers Holdings and Royal Bank of Scotland, respectively.

RBS Securities, the mortgage lender on the 124,000-square-foot, 13-story building at 627 Greenwich Street that was slated to be transformed into a condominium development pre-crash, took control of the property today for just $40 million, the amount of the original mortgage on the property. The upset price, the lowest price at which the property would be auctioned or sold, was set at $110 million. There were no competing offers despite the presence of several observers.

The borrower, an investor group led by Peter Moore Associates and KMG Partners, had an outstanding lien of more than $100 million at the property, The Real Deal previously reported.

Meanwhile, after finally coming back to life as a 305-unit rental property last year, developer Kent Swig’s former mammoth office building at 25 Broad Street was auctioned back to lender Lehman Brothers for just $1,000 today, though an attorney for Lehman stated from the offset that the firm was prepared to pay up for $340 million, the amount of the total outstanding lien. The statement apparently left some in the room disappointed; a female broker representing a Spanish real estate investment trust approached Mark Slama, an attorney for Lehman, after the auction to inquire whether the company might still entertain offers. Slama said he was legally bound to present all offers to his client but declined to further elaborate.

The female broker declined to identify her client or herself to The Real Deal.

As previously reported, Lehman initiated foreclosure at 25 Broad in January 2009 through mortgages it made on the building at the corner of Exchange Place in the Financial District in 2007. Lehman foreclosed on three separate commercial mortgages issued to Swig at the building, including a senior mortgage loan of $231.68 million, a building loan mortgage of $19.67 million and a project mortgage loan of $26.66 million, all issued in March 2007.

“The matter is now concluded,” Slama told The Real Deal when asked for a statement, later joking with colleagues, saying: “Party tonight at 25 Broad.”

Mingling in the lobby of the 60 Center Street after the auction, some brokers speculated that Lehman, free to bid on 25 Broad now that it exited bankruptcy, might have held off handing over control of the property in order to market it together with a neighboring site it controls at 45 Broad Street.

The building at 45 Broad Street, slightly south of 25 Broad, hit the foreclosure auction block in November 2011 with an outstanding lien of $72.5 million in total, The Real Deal previously reported. Lehman took control of that property last month for $76.79 million, according to public records.

“They’re going to bring them to market in a big way,” Lawrence Porter, a managing director of Newmark Knight Frank who attended the auction, speculated.

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