Macklowe files first suit to remove tenants at 737 Park Avenue

Harry Macklowe and 737 Park Avenue

Harry Macklowe’s development firm that is primed to carry out the $360 million condominium conversion of the pre-war apartment building at 737 Park Avenue, filed its first lawsuit related to the building this week, claiming a married couple living in a market-rate apartment is refusing to leave even though their lease expired last month.

Macklowe’s company for the project, 737 Park Avenue Acquisition, filed the lawsuit Tuesday in New York State Supreme Court against Barry and Joan Shalov, seeking an order from the judge to force them out of the 21-story Lenox Hill building, at the corner of 71st Street, despite their desire to stay.

Condo conversion experts predicted that it would not be easy converting the occupied building, with 103 apartments. The fact that Macklowe had to resort to a lawsuit to remove market-rate tenants living with an expired lease — presumably with no rights to stay — only underscores the potential challenges.

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Macklowe, CEO of Macklowe Properties, along with equity partner California investment firm CIM Group, is redeveloping the property into luxury condos. They bought the building in August for $253 million, and plan to spend about $107 million more to reposition the building for a total of $360 million. The Shalovs began renting the 2,227-square-foot, two-bedroom apartment on the 16th floor in 1995, and most recently paid $6,562 per month, the filing says. Court papers and marketing material for the building say that lease expired Aug. 31.

The Shalovs have refused to move out and in fact want to sign a new lease, the suit claims.

“Owner has received communications on behalf of [the Shalovs who] contend they are entitled to an extension of their tenancy or renewal of a lease,” the complaint says.

Macklowe, through a spokesperson declined to comment. The Shalovs could not immediately be reached for comment.