Harry Macklowe has been served a default notice, according to reports, and could face foreclosure on some of the seven Manhattan buildings he bought last winter for $7 billion. Mr. Macklowe could not reach an agreement with some lenders to get an extension on $3.1 billion in debt on four of the buildings.
He has apparently reached a deal with his primary lender, Deutsche Bank, on $5.8 billion of the debt that involves him turning over control of the seven buildings while retaining the titles. But the negotiations with subordinate lenders have stalled, according to reports. Interesting aside: One of those subordinate lenders is Vornado Realty Trust, led by Steve Roth. Vornado doesn’t want to turn over control of the buildings from Mr. Macklowe as that may lead to a sale; and, these days, the buildings may not sell for as much as they did just 12 months ago.