Macklowe Properties, along with an unidentified foreign equity partner, is buying the retail space at the super-luxury 432 Park Avenue condominium tower for approximately $450 million from CIM Group, several industry sources told The Real Deal.
While Macklowe, led by chairman Harry Macklowe, is widely described as the co-developer with CIM Group of 432 Park, his ownership stake has always been unclear.
Macklowe was the original driving force behind assembling the land above the site, on which the high-priced residential condo with retail at the base is now rising. The tower has entrances on Park Avenue, 56th Street and 57th Street. But in 2010 his lenders forced a sale of the property for more than $200 million less than the value of the loans on the property, city records show, and in similar situations most equity owners had their stakes wiped out, and insiders have long speculated that was the case with Macklowe.
With this purchase, he is again undisputedly an owner of a portion of the project he long struggled to build. Macklowe Properties and CIM, through spokespersons, declined to comment.
According to an analysis of condominium plans filed with the New York State Attorney General, there are three retail condominium units — identified as A, with 9,276 square feet; B, with 42,258 square feet and C, with 23,282 square feet, yielding a total of 74,816 square feet. The purchase price would equate to about $6,000 per square foot.
The news comes a little over a month after the Chera family’s Crown Acquisitions partnered with Oxford Properties Group to purchase the entire office building 450 Park Avenue, which is adjacent to 432 Park Avenue. Crown and Oxford paid $545.75 million for the building, with more than half of the value in the approximately 35,000 square feet of retail at the base of the building, estimated to be about $7,000 per square foot.
Macklowe eyed 450 Park when it was being marketed by Eastdil Secured brokers Doug Harmon and Adam Spies, several sources told TRD. Macklowe has also approached additional owners along 57th Street to see if he can create a larger retail presence, industry insiders added.
Insiders said there was still a possibility to combine the retail at 432 and 450 Park Avenue, but it was not critical to either project.
Macklowe began assembling land for the ambitious project nearly a decade ago, with the acquisition of the Drake Hotel at 440 Park Avenue in 2006 for $418 million.
It took him years to acquire neighboring, smaller buildings along 57th Street. He was successful in part, but several holdouts frustrated his plan for an unbroken stretch on the street.
During the downturn, Macklowe ran into a financial squeeze. In 2008, his lender Deutsche Bank filed to foreclose on a large loan, and in 2010 CIM purchased the site — that had loans totaling more than $543 million — for $315 million. But he remained in place as the developer.