Zuckerman and Partners Buying GM Building for $2.9 B.

A group led by Boston Properties chairman and Daily News publisher Mort Zuckerman is set to buy the GM Building from the embattled Harry Macklowe for about $2.9 billion, according to a Saturday morning announcement from Mr. Zuckerman's firm. (The announcement can be read here.) It is the biggest building sale in U.S. history, trumping the $1.8 billion deal for 666 Fifth Avenue, which closed in early 2007.

Mr. Zuckerman's group, which includes Goldman Sachs and Morgan Stanley as investors and advisers, also is set to buy three other midtown towers belonging to Mr. Macklowe: 540 Madison Avenue, a 39-story building at 55th Street; 125 West 55th Street, a 23-story building between Sixth and Seventh avenues; and the 44-story Two Grand Central Tower between Lexington and Third avenues.

The four-tower deal, according to Boston Properties, totals approximately $3.949 billion, including $1.4655 billion in cash and the assumption of $2.4735 billion in fixed-rate debt. The sale of the GM Building is expected to close in June and the others shortly after.

It's been four months since Mr. Macklowe, aching under billions in debt, put the 50-story, two million-square-foot tower at 767 Fifth Avenue on the sales market through broker Darcy Stacom of CB Richard Ellis. During those months, speculation flourished regarding the possible sales price of arguably the world's most valuable office tower and the very fate of Mr. Macklowe himself. He had bought the GM Building in 2003 for $1.4 billion from Donald Trump and Conseco Inc. in what was then a record office-building sale.

Leveraging that property jewel, among other assets and just $50 million of his own money, Mr. Macklowe bought seven Manhattan office towers from Sam Zell's Equity Office Properties, via the Blackstone Group, in February 2007 for $7 billion. At the time, it seemed a truly triumphant move typical of the gutsy gamlber that was Mr. Macklowe's reputation in the commercial real estate game.

“He’s owned a considerable amount of real estate, but this moves him into the top tier of larger owners,” Douglas Durst, the longtime landlord and developer, told The Observer at the time. “It’s a big jump for him.”

Then, the credit crunch hit; suddenly, Mr. Macklowe, who owed billions to lenders Deutsche Bank and Fortress Investment Group, didn't have the money to pay his loans back and he couldn't get banks to refinance. The 70-year-old, however unfairly, became the poster boy for Manhattan real estate, post-boom.

Enter the tower sales.

According to Bloomberg News, the money from this deal will allow Mr. Macklowe to retire the $1.4 billion he owes to Fortress for the $1.2 billion loan it made to him in 2007. Deutsche Bank has taken control of the seven office towers and put them on the sales market. (None of those towers were involved in Saturday's deal with Mr. Zuckerman's group.)

What does this record deal mean for the larger Manhattan office market, which has been waiting for Mr. Macklowe's major move for months? We will have more coverage on that in Wednesday's Observer print edition.

Until then, all eyes fall on Mr. Zuckerman, whose Boston Properties may very well now become the largest office landlord in New York City.

“We’re thrilled,” Mr. Zuckerman told The New York Times. “It is a real commitment to Manhattan and New York City and a real commitment to the future.”