From left: Steven Roth, Stephen Ross, Darcy Stacom, Marc Holliday and Norman Sturner
These days — with credit tight and lawsuits sprouting like weeds — no real estate transaction is simple. Whether it’s a one-bedroom condo or a distressed office building, sales are often slower and more complicated than expected.
That said, some deals have so much “hair” on them that they deserve special recognition. This month, The Real Deal took a behind-the-scenes look at some of the most complicated deals in the last year.
These include some of the city’s highest-profile transactions, such as Google’s $1.77 billion purchase of the Chelsea office building at 111 Eighth Avenue. The building’s owners were able to lure the technology behemoth into an all-cash deal, but only after they spent a nerve-racking two weeks — during which the property was not actively marketed — waiting for Google’s top brass to approve the record-setting sale. (See “Google’s ‘search’ gets a hit.”)
When Vornado Realty Trust decided to buy the underwater office building One Park Avenue, it had to scramble, with only weeks to negotiate a deal with the property’s owners and lenders and work out a lease expansion with NYU Langone Medical Center, all while fending off the advances of opportunistic real estate operator Scott Rechler. (See “Race for a recap.”)
Some extremely hairy deals aren’t a race against time, but rather a waiting game.
For example, the sale of 607 Hudson Street went into contract in 2007. It didn’t close for almost four full years — one of the city’s longest purchase agreements for a straightforward real estate transaction, industry experts said. (See “Patients’ is virtue in sale of nursing home”)
Others require extraordinary measures.
For example, in late 2010, the Manhattan County Clerk was handed a cashier’s check for over $250 million intended to put an end to litigation in the now-famous battle over 3 Columbus Circle. It didn’t work, but it helped lead to a resolution in the deal. (See “A ‘tender’ offer.”)
Meanwhile, for clothing retailer Syms, completing a deal for a coveted new Fifth Avenue storefront required squeezing into a space that initially appeared far too small. The apparel company was able to make it work by cobbling together three separate spaces on different floors — which involved $1.5 million worth of construction by the landlord. (See “Syms tightens belt for move.”)
Residential properties may be priced lower than their commercial counterparts, but the deals can be equally epic. That’s what one homebuyer discovered when she found a bargain-basement fixer-upper in Downtown Brooklyn — then spent a year waiting to take possession of it while wrangling with banks, appraisers and even ornery pit bulls. (See “The (other) Brooklyn Flea.”)
Finally, the recent sale of the palatial Henry T. Sloane mansion required 48 hours of frenzied deal-making as a Ukrainian billionaire rushed to buy up the property’s debt in time for a scheduled foreclosure auction (see “Pre-auction frenzy”). For more on all of these deals, read on.