Developer Harry Macklowe’s descent from the pinnacle of Manhattan real estate will continue apace April 30, the day bids are due for several of the seven Manhattan towers he bought so spectacularly in February 2007.
Those readying bids for the cloud-busters include many of the same developers who circled Mr. Macklowe’s General Motors Building earlier this year, eager to snatch the choicest jewel from his fallen empire, according to a well-placed source familiar with the bidding process.
Larry Silverstein, who withdrew from bidding on the GM Building, is considering a number of the other Macklowe skyscrapers, including 1301 Avenue of the Americas, the Credit Lyonnais Building, at the corner of 52nd Street.
The portfolio also includes Tower 56, 527 Madison Avenue, Park Avenue Tower, Worldwide Plaza, 1540 Broadway and 850 Third Avenue. It’s unclear who the other bidders are, but the pool of contenders should be a small one.
In contrast to the halcyon days of early ’07, when Macklowe put a mere $50 million (that’s .71 percent) of his own money down for the $7 billion Equity Office Properties portfolio, financiers will be demanding a lot more cash on hand—some say as high as 30 percent. “It’s unlikely these buildings will set any records, except for the GM Building, if it ever gets sold,” said the source.
Following a flurry of press coverage and two rounds of bidding earlier this year, news on the sale of the GM Building, which Mr. Macklowe used as collateral for the Equity portfolio purchase, has been so quiet you could hear a pin drop from the tower’s 50th floor.
The most recent reports—now nearly two weeks old—indicated that Daily News owner and real estate billionaire Mort Zuckerman was likely the highest bidder.
The GM Building is expected to sell for at least $2.8 billion, not nearly as much as Mr. Macklowe was reportedly hoping for.
The reasons are many. The GM Building, at 767 Fifth Avenue, may be one of New York City’s great capitalist emblems, but its luster has been tarnished by its collection of locked-in, relatively low-rent leases; the sputtering economy; Mr. Macklowe’s apparent insistence on retaining some stake in the building; and ongoing litigation on two fronts.
Not only is the legendarily litigious Sheldon Solow suing Conseco Inc., from whom Mr. Macklowe bought the building, claiming the 2003 sale was invalid, but so is the relatively less well-known real estate investor Leslie Dick.
Mr. Dick, for one, believes litigation is indeed a factor in the delayed sale.
After filing a motion for discovery at the First Department of the Appellate Division of the New York Supreme Court on April 10, Mr. Dick told The Observer, “Buyers understand that the title to the property is really in question.”