Commercial
New York
Harry Macklowe avoids foreclosure auction on 432 Park Ave units
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Macklowe inks deal with CIM to save his 432 Park Ave pads, for now
Developer has five months to refinance or sell his units in trophy tower
CIM Group’s foreclosure against Harry Macklowe’s personal units at 432 Park Avenue is off — for five months, anyway.
The firm initiated a foreclosure last August against Macklowe’s equity stake in condos at the trophy tower he co-developed. Macklowe delayed the foreclosure in October with a bankruptcy filing.
Now they have reached a deal that buys Macklowe more time.
The dispute came to light when CIM sued its famous partner last June. CIM said Macklowe defaulted on $46 million in loans it provided him to purchase units they built at 432 Park. Macklowe alleged CIM swindled him out of $110 million in distributions he was owed as a developer.
Under the new agreement, Macklowe has until Oct. 24 to either refinance CIM’s loan or sell the units. It also sets an 8 percent interest rate for the loan.
The settlement will end the foreclosure and bankruptcy proceedings, but not an arbitration case brought by Macklowe against CIM.
Macklowe’s attorney did not immediately return a request to comment. CIM also did not return a request for comment.
Macklowe bought the site for 432 Park Avenue, which was then the Drake Hotel, for $413 million in 2006. In 2010 CIM swooped in and paid off his debts in the property. Macklowe sold his interests to CIM, which agreed to pay the developer a promote, or a fee, on future sales.
According to court filings, Macklowe and his then-wife entered into separate contracts to purchase two of the units for over $46 million. The contracts remained in place for 10 years until Macklowe decided to purchase the units.
CIM lent Macklowe $46 million, mostly in mezzanine loans. After CIM launched a U.C.C foreclosure, alleging Macklowe defaulted, Macklowe put the companies controlling the units in bankruptcy to stop the foreclosure at the last minute.
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