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Eight of Manhattan's Top 20 Distressed Properties in Downtown; Big Names Among the List: Apthorp, Toy Building, 20 Pine
Eight of Manhattan’s top 20 distressed properties fall in downtown; and several are well known: the Apthorp apartment building; the condo conversion 20 Pine The Collection, where some of the interiors were designed by a branch of Giorgio Armani’s empire; Kent Swig's 25 Broad; the Riverton in Harlem; the Jean Nouvel–designed condo at 100 11th Avenue; the Philippe Starck–backed 95 Wall (where Gossip Girl's Chace Crawford reportedly has an apartment); all three downtown AIG buildings; and a few former Harry Macklowe holdings.
“What’s different about this down cycle is there still appears to be unlimited demand once you reduce your price point for people,” said Dan Fasulo, managing director for research at Real Capital Analytics, which provided the data. “And the problem is many owners and developers are into the project at pricing levels that don’t give them the flexibility to lower prices on the market without getting wiped out.”
The distressed properties are ranked by their value at mid-year 2009.
—By Bonnie Kavoussi
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Worldwide Plaza at 825 Eighth Avenue: $1.6 B.
George Comfort & Sons was in contract in early June to buy Worldwide Plaza—the last of the Macklowe selloff. But Deutsche Bank suddenly backed out a week before they were scheduled to close the deal on June 30—even though George Comfort & Sons and partners had already invested $50 million to $100 million in the property. According to Real Capital Analytics, New York City’s 16th-tallest building has the city’s tallest estimated worth for a building with troubled assets: $1.6 billion.
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AIG Building at 70 Pine Street: $694.6 M.
When stocks for the bank too big to fail started falling precipitously in September, it realized by December it needed a new owner for its downtown headquarters—and fast. It finally entered a contract with Korean-American developer Young Woo in June for him to buy the Art Deco skyscraper and AIG’s smaller building at 72 Wall Street for a combined $141 million—a smaller sum than the government’s $180 million bailout. More bonuses, please, Mr. Geithner?
PropertyShark.
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The Toy Building at 200 Fifth Avenue: $416 M.
Playtime's over! Recently revamped by L&L Holding from a toy company showroom into Class A office space, replete with glass walls and a rooftop garden, the century-old Madison Square Park building, once the hub of the toy industry, was co-owned by Lehman Brothers, which has made it harder to market. Over half of the 14-story building’s office space is still available, and while it may look serene from its perch a few blocks from The New York Observer, it was mortgaged last June to the German bank Helaba Landesbank Hessen-Thüringen for $415 million. Hallo, schuld!
PropertyShark.
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175 Water Street: $414.4 M.
AIG plans to move its employees from 70 Pine Street and 72 Wall Street to 180 Maiden Lane—and to the sleek AIG building that Young Woo is not in contract to buy, 175 Water Street, by the end of 2010.
PropertyShark.
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2360 Broadway: $375 M.
This building boasts Banana Republic on its bottom floor and apartments above. The landlord, Extell Belnord LLC, mortgaged it to UBS for $375 million in October 2006—but no sign yet of whether it will be able to repay the loan.
PropertyShark.
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45 West 139th Street: $367.5 M.
Central Harlem’s Savoy Park Development unwittingly borrowed $242.4 million from Column Financial Inc. in January and March 2007 to help fund this 16-story, red-brick apartment building along with four nearby apartment buildings. On May 8, Column Financial announced that it is now no longer an active mortgage lender, and Credit Suisse will sell off its remaining loans.
PropertyShark.
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72 Wall Street: $291 M.
This 13-story building, built in 1925, is the other trophy of Young Woo’s daring real estate purchase from the nationalized mess AIG. It will be interesting to see what Mr. Woo—who is known for his modern, consumer-oriented style—does with the skyscraper, once he actually closes the transaction.
PropertyShark.
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95 Wall Street: $272 M.
The Financial District’s most expensive luxury rental building launched the same September day Lehman Brothers collapsed, and the stock markets with it. But not to worry! Dwell95—redesigned by French product designer Philippe Starck, developed by the Yoo development firm—reportedly has at least one new glam tenant: Gossip Girl’s Chace Crawford. Too bad the star can’t pay off their $230 million mortgage to KeyBank.
PropertyShark.
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20 Pine Street: $255 M.
20 Pine The Collection, where some of the interiors are designed by Giorgio Armani's firm and the sales office was Manhattan's first to be 24 hours, was supposed to lead a new wave of residential development in the Financial District: a transformation of FiDi, if you will. What more symbolic building to convert than JPMorgan’s old headquarters? But construction and sales kept running into delays, now rents keep getting slashed, and a Brooklyn-based buyer sued the developer Shaya Boymelgreen and marketer Michael Shvo. The building was supposed to be ready for occupancy in January 2007—but the amenities (including the pool) were finished just last month. Thanks to the recession, even luxury is going out of style. Mr. Boylmelgreen bought the building for about $170 million, with a $150 million mortgage from Barclays. The conversion reportedly cost $380 million, and 103 pricey condos are still looking for tenants.
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25 Broad Street: $231.7 M.
The Exchange condominiums were supposed to be FiDi’s “veritable ‘horizontal townhouses,’” replete with marble-floor bathrooms, a gym and a day spa, just one block from the New York Stock Exchange. But sales and development for the office-building-turned-condo were suspended in October 2008, since funding from the bankrupted Lehman Brothers had halted—rendering developer Kent Swig unable to pay contractors. Mr. Swig, who bought the building for $260 million in August 2005, had mortgaged it to the soon-to-fail bank for $278 million in March 2007—but rather than sell off its debt, Lehman is trying to foreclose 25 Broad. The Exchange’s one-bedroom apartments, which were being listed for $815,000 to $980,000 and are now off the market, cannot help now. Rather than head the new residential trend in FiDi, 25 Broad is now in the front of The Real Deal’s May feature, “New York City’s Future Ghost Towers.”
PropertyShark.
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650 Fifth Avenue: $225 M.
Iran’s nuclear ambitions are tied to why this 36-story commercial skyscraper is in limbo. In December 2008, the U. S. seized 40 percent of the building’s interest, accusing the Iranian government–owned Bank Melli of secretly owning a stake in the building through a shell company for nearly two decades. If that wasn’t already illegal, the Tehran-based Melli has been helping fund Iran’s nuclear program. The charity organization the Pahlavi Foundation, founded by the last Shah, still has its 60 percent share, but the feds aren’t done with their investigation yet. (If the investigators need a break, they can always walk a block away to the Museum of Modern Art.)
PropertyShark.
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2156 Madison Avenue: $225 M.
The Riverton Apartments—a seven-building, 14-story, rent-regulated Harlem apartment complex bordering 135th Street—defaulted on a $225 million mortgage in October 2008, and a foreclosure suit was filed in February 2009. The borrowers, Laurence Gluck’s Stellar Management and Rockpoint, had planned to convert 53 percent of the 1,230 apartments, which are rent-stabilized, into market-rate apartments by 2011. So far, only 10 percent of the apartments have been converted, and construction has stalled. Discussions with lenders are ongoing, and foreclosure has been postponed—for now.
PropertyShark.
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The Drake Hotel Site at 440 Park Avenue: $224 M.
When Harry Macklowe bought the classy 80-year-old Drake Hotel in a highly leveraged deal in 2006 for $440 million, he tore it down a year later in hopes of building a grand new 30- or 50-story development. But Deutsche Bank sued Mr. Macklowe and others in May to foreclose on the $482.9 million they had loaned to develop the site. Another lender, iStar Financial, put its $224 million mortgage on the market in November 2008 but has stopped marketing the defaulted loan as of May 6.
PropertyShark.
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475 Fifth Avenue: $150 M.
Developer Joe Moinian and Westbrook Partners bought the commercial building in 2007 for $162 million with plans to redevelop it. But after kicking the current tenants out, they could not find new tenants. Defaulting on loans, they were negotiating with Barclays in March to return the keys (they paid only $30 million in equity, mostly from Westbrook).
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56 Leonard Street: $136.5 M.
The Alexico Group’s luxury 57-story Tribeca condo-to-be, designed by Jacques Herzog and Pierre de Meuron, was supposed to be a treat for the eye: Jenga-like floors in a vertical glass building. Condos would range from between $3.575 million to $21.5 million. But construction was essentially halted in December, and Alexico needs Eurohypo to provide its remaining construction financing before work can continue. Records show that the European bank agreed to loan $120.4 million to Alexico.
PropertyShark.
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The Apthorp at 2111 Broadway: $135 M.
Even the famed Apthorp is not immune from financial trouble. Just like the developers of the Harlem apartment complex (#12), owners Lev Leviev and Maurice Mann started converting the Apthorp’s apartments to luxury condos (more than half of their 163 units were rent-stabilized). But Apollo Real Estate Finance made a $22.7 million capital call in December, then threatened to foreclose. At one point, Mr. Leviev had proposed selling the entire building for $552 million. After battling with Mr. Leviev in court, Mr. Mann resigned as managing partner of the project in January. As of June 9, records show that financing with Apollo and the recently nationalized Anglo Irish Bank has been “restructured on unknown terms.” Meanwhile, prices have been slashed to move enough units to meet a September deadline for declaring the condo offering plan effective.
nyc-architecture.com
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1330 Avenue of the Americas: $130 M.
Harry Macklowe bought this office trophy in December 2006 for $498 million—but, humiliatingly, Montreal-based mortgage lender Otera Capital walked away with it in April at a foreclosure auction for only $100,000. This is the only property out of the 20 here that has actually been foreclosed.
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225 Rector Place: $117 M.
The Michael Shvo–marketed rentals-to-condo FiDi conversion was being funded by Lehman Brothers and Anglo Irish Bank; and you know it’s a bad sign when your two main lenders have, respectively, gone bankrupt and been seized by the Irish government. In February, the newly nationalized Anglo Irish Bank filed a foreclosure suit against the developer, Yair Levy, alleging that he owes the bank $117 million. Well, then.
PropertyShark.
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100-104 Fifth Avenue: $114 M.
The company that bought the office condos at 100 Fifth Avenue for $152 million in February 2008 is now undergoing solvency proceedings in the United Kingdom, the New York Post reported Wednesday. Meanwhile, PricewaterhouseCoopers—as shareholders—has taken over operations as the administrator of 100 Fifth and some 46 other properties, mostly in England. So far, they’ve said they have no intention of selling those assets—yet.
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100 11th Avenue: $110 M.
The West Chelsea luxury condo, designed by Jean Nouvel, is about $50 million over-budget and a year behind schedule. But that isn’t the worst of it: Fremont Investment and Loan is also forcing the developer, Cape Advisers, to refinance their $110 million construction loan. But at least construction seems to be undeterred for now, and the building does look kind of nice.
