The Stakes for Harry Macklowe
The Wall Street Journal this morning lays out the stakes for Harry and Billy Macklowe. Bottom line, they owe billions to Deutsche Bank and hedge fund Fortress Investment. They used the billions to finance the epic $7 billion purchase of seven Manhattan office buildings one year ago this month.
Now, the bills are due something awful and the Macklowes may face the disappearance of much of their hard-won empire:
Mr. Macklowe's loss would earn him a page in the history of great real estate debacles. It will be bigger than the $2 billion loss Mitsubishi Estate Co. took when it walked away from its stake in New York's Rockefeller Center in the mid-1990s. And it will be swifter than the 1992 bankruptcy of London's Canary Wharf that led to the eventual dissolution of development giant Olympia & York.
43 CLARKSON
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The Macklowe purchase at the time was a sound business decision. Some of the best financial and legal personalities in the business reviewed, recommended and applauded the purchase.
Unfortunately no one could have predicted the collapse of the sub prime lending market. This story is bigger than the Macklowes, who got caught up in the credit crunch, it is about the deterioration of the American dream.
The Macklowes and their company will not go the way of O&Y rather they will come back bigger and stronger. We can only hope that John and Jane Citizen can emerge from this crisis unscathed.
The Macklowes should find some NEW financial and legal personalities to review future purchases. Of course they applauded the purchase because each of those personalities probably stood to make some nice $$$ for their recommedations. This unfortunate business decision has very little to do with subprime issues but more with the ferocious greed of banks, hedge funds, lawyers, brokers and so on, that feed on higher and higher yields that real estate investments and other related packaged deals offered. Why aren't other commercial real estate companies indemise? It is a shame that so many years of taking risk and building an magnificant empire has been dismantled from the recommendations of these personalities to, for a lack of a better term, put all their eggs in one basket and in the end, only the Macklowes stood to lose....Dear Macklowes, It may be time to clear the decks of these personalities because, as many of us know, you have the intelligence, creativity and foresight to have an empire that many in your field could only dream of developing themselves. The problem is not with buying at the top of the mkt or the buildiings themselves, it is quite simply the people who advise you. I look forward to your comeback, bigger and smarter than ever before.
this first poster is obvioulsy macklowes pr people. they post the same nonsense on all of these comment pages. the macklowes are finally getting what they deserve. anyone that knows them personally or professionally knows this. full stop.