The buzzards are taking their time picking apart the seven-limbed body of midtown buildings that Harry Macklowe snatched to great acclaim in 2007.
A source has confirmed that Somerset Partners, the outfit that last year bought 450 Park Avenue from Taconic Investment Partners for $509 million, is one of a number of predators circling 527 Madison Avenue, which has an asking price of $240 million; and that Transwestern, a little-known Chicago firm, is tearing off Tower 56 at 126 East 56th Street for $160 million.
But even when those buildings trade, four of the septet—Park Avenue Tower, Worldwide Plaza, 1540 Broadway and 850 Third Avenue—the choicest of meat in good economic times, will remain up for sale.
A year and a half ago, these buildings would have traded in days (in fact, they did). It took Mr. Macklowe, then the CEO of Macklowe Properties (post-apocalyptically deposed by his spawn Billy), 10 business days to leverage his personal assets, the GM Building, and a mere $50 million for the $7 billion purchase. Once the credit crisis came a-growling, Mr. Macklowe had to forfeit the portfolio to Deutsche Bank. As of Tuesday, Deutsche Bank has had four of the seven, known as the Equity Office Portfolio, on the market for five months.
The reasons for the glacial pace are at this point obvious.
Eric Michael Anton, the executive managing director at Eastern Consolidated, said that aside from the complexity of the deals, the deplorable economic news is casting a kryptonite-green glow on the very notion of investing in New York City.
“Day after day after day we see negative news in the press,” Mr. Anton said. “One day there’s Freddie and Fannie. The next day, Governor Paterson is saying the economy is going to be worse than in the ’70s. The ’70s were bad. They were really bad. The city almost had to file bankruptcy. If you pick up the paper and it says the state is about to enter a budget crisis, it doesn’t give anyone confidence. It gives them the opposite of confidence.”