Harry Macklowe, the real estate maverick who’s famous for his highs and lows, is facing distress.
Fortress Investment Group initiated foreclosures tied to two of Macklowe’s properties: a site near the Dadeland Mall in Miami and Midtown rental where Macklowe once planned a supertall office tower.
Fortress is seeking to foreclose on Macklowe’s equity interests in 5 East 51st Street in Midtown Manhattan and 8609 Southwest 72nd Avenue in Miami. A U.C.C. foreclosure avoids the judicial process and allows a lender to take over a company that indirectly owns property. Often, these foreclosures are halted by a bankruptcy filing.
An auction is set for June 3. Macklowe’s outstanding debt for each property is $40.7 million, according to the marketing materials.
Brock Cannon of Newmark is marketing the foreclosure. Matthew Mannion of Mannion Auctions is the auctioneer. Macklowe did not return a request to comment and Fortress declined to comment.
Macklowe took on $191 million in loans from Fortress in 2019 for three Midtown properties, including a six-story rental building at 5 East 51st. The properties were part of assemblage where Macklowe tried to build a super-tall office tower known as “Tower Fifth.” The project would rise 1,500 feet, span 1 million square feet and cost upwards of $1 billion. But those dreams appear to be over. Macklowe failed to close on the purchase of another piece of the assemblage at 14 East 52nd Street last year.
In 2022, Macklowe took on a $39 million loan from Fortress for his Miami project. The 1.7-acre piece of land sits between Simon Property Group’s Dadeland Mall and Jeff Berkowitz’s Dadeland Station. It marked Macklowe’s first major purchase in South Florida. The property is approved for 770 residential units in two 25-story towers. Earlier this year, Macklowe put the property up for sale.
Macklowe, in his late 80s, is a titan of New York real estate. But lately he’s faced some troubles throughout his company and personal portfolio. CIM Group initiated a foreclosure on his personal units at 432 Park Avenue, but he stopped the foreclosure by putting the company that controls the properties into bankruptcy. He is listing his Hamptons estate for $38 million.
Fortress, an investment firm with $48 billion in assets, is among the more active buyers of distressed real estate. It has taken over as the lead developer 125 Greenwich, a stalled 71-story condo building in Lower Manhattan. Fortress also recently filed suit against Cohen Brothers Realty, alleging the developer defaulted on $534 million on a Fortress loan tied to seven properties.