Silverstein Among Bidders Offering Over $3B for GM Building in NYC

The competition is on to acquire Macklowe Properties’ 1.8 million-square-foot General Motors Building in Midtown Manhattan, and Silverstein Properties has thrown its hat into the ring. A source familiar with the bidding process has confirmed to CPN that Silverstein Properties, the New York City real estate company behind the World Trade Center redevelopment, has made an offer of more than $3 billion. Faced with a $7 billion debt on a portfolio of office buildings acquired last year from Equity Office Properties, Macklowe is in a hurry to sell the GM Building (pictured) to pay off part of the obligation. Bids for the property at 767 Fifth Avenue were due to CB Richard Ellis Inc., which is marketing the building on behalf of Macklowe, on Feb. 15. According a Wall Street Journal article today, Silverstein is not the only one wiling to shell out over $3 billion for the 50-story skyscraper. At least two other such offers came in, including one from New York real estate investor Joseph Cayre who teamed up with partners in the Middle East in a bid to snatch up the property. Any of the acquisition proposals would leave Macklowe with a hefty profit, as the company acquired the office tower from Conseco in 2003 for $1.4 billion. At that time, the transaction marked the largest-ever single-asset real estate transaction in the United States; this time around the change in ownership could mark yet another record. However, it may not sell at all right now, as legal action concerning the GM Building is still pending. About a week ago, news emerged that Leslie Dick Worldwide Ltd. had filed a Notice of Appeal of a court’s decision to lift the Lis Pendens–a notice that a property’s ownership is being disputed–which Leslie Dick Worldwide had recorded against the property. Leslie Dick, president of the real estate investment concern, contends that Conseco’s sale of the GM Building to Macklowe in the 2003 auctioning of its bankruptcy estate was fraudulent. According to Dick, his company submitted the highest bid, $1.5 billion, but Conseco sold the property to Macklowe for $100 million less. Dick would not comment on the status of the appeal, however, he did have something to say about the current bids for the GM Building. “I don’t think the building is worth more than $2.5 billion,” he told CPN today. “The New York office market is headed for a downturn, because everything in the real estate business is cyclical.”