Macklowe May Have Tapped CBRE to Sell, Refinance GM Building
- Jan 16, 2008
As reported by various media outlets, Macklowe Properties may have hired CB Richard Ellis Inc. to either sell or recapitalize the company’s prized General Motors Building in New York. A source familiar with the deal confirmed the pairing to CPN, but both CB Richard Ellis Inc. and Macklowe declined to verify or comment. Macklowe purchased the building, located at 767 Fifth Ave., for a record $1.4 billion in 2003. At that point, CB Richard Ellis Inc. was hired to oversee the building’s leasing. “This makes sense,” Eric Anton, executive managing director for Eastern Consolidated, told CPN. “When (Harry Macklowe) purchased the building at that record price, everyone said he was crazy–but he was right.” What was then valued at $1.4 billion can possibly go for up to $3.8 billion, he added, and that the building’s staggering value will bring good offers. Anton is not involved in the transaction. According to reports, Macklowe has until next month to come up with approximately $7 billion to pay back short-term loans used to buy eight Manhattan buildings once owned by Equity Offices Properties Trust. About $5.8 billion was a non-recourse loan from Deutsche Bank, and $1.2 billion was a bridge equity loan from Fortress Investment Group L.L.C. Reuters reported that if Macklowe defaults on the first, Deutsche bank can take the 6.6 million-square-foot Equity Office portfolio. The second is secured by 49 percent interest in other Macklowe properties, so if the company defaults on that, it will still have 51 percent interest and control in the properties. On a related note, a Dow Jones report said that a federal judge ruled Monday that real estate developer Sheldon Solow’s can proceed with claims against Conseco Inc., which sold the GM Building to Macklowe in 2003. Solow’s suit claims that he had the highest bid in the sale, but the building was instead awarded to Macklowe.