Major Developments
Mall of America developer Triple Five has reached a deal with lenders and New Jersey Gov. Chris Christie's administration to reboot and expand the stalled Xanadu complex in the Meadowlands,. The checkered, 2.4 million-square-foot complex, originally envisioned as a retail and entertainment destination that would rejuvenate East Rutherford, has sat incomplete along the New Jersey Turnpike for years, sapping up $1.9 billion in the process and developing a reputation as the poster child for failed boom-time real estate projects.Real estate investment firms Savanna and Monday Properties are launching a $30 million capital improvement for a 20-story, 260,000-square-foot commercial building on Park Avenue South. The owners' plan for 386 Park Avenue near 27th Street includes renovations for the building's lobby, windows, elevators, restrooms and heating and cooling systems.
Edison Properties has made it known why it was leading the city's drive to land a new zoning designation for the old Fur District just south of Penn Station. The developer plans to build a 407-unit residential tower at 249 West 28th Street. City Planning Commissioner Amanda Burden wants to create a new designation and apply it to the area to encourage growth and development around the neighborhood's Class B and C office space.
Professors Karl Case and Robert Shiller, discussed the results of the most recent index, which showed a 3.3 percent decline in housing prices in February. Case said the U.S. housing market has already experienced a so-called "double-dip," as housing prices plummeted from their 2006 highs, then rebounded briefly due to the homebuyer's tax credit, and now the market has returned to previous lows. Case cited an "incredible decline" in households -- "we're not building any new houses, and yet vacancy rates are still going up," he said -- as a major area for concern. Meanwhile, Shiller said the 8.8 percent unemployment rate and the difficulties associated with getting financing are plaguing the market.
Columbia University has scaled back plans for a new public school that it had promised to build as part of its new Manhattanville campus, inciting the ire of a community already on edge about the invasion of the university's construction crews. Teachers College Elementary had been slated to open in the fall as a pre-kindergarten-through-eighth grade school, but Columbia officials said last week that they have not been able to find a large enough space to house it, and will consequently only be able to accommodate kindergarten through fifth grade. What's more, the first year of the school's existence will be tried out across town in East Harlem, rather than the neighborhood it was actually intended to serve.
Red Apple Real Estate submitted a new proposal for developing 500,000 square feet of mixed-use space at the west end of the Coney Island boardwalk, according to the Architect's Newspaper. The plan, which was slated to go before Community Board 13 today, calls for three residential towers ranging from 14 to 22 stories with a total of 400 market-rate condos above 25,000 square feet of retail and 400 parking spaces. Red Apple, led by John Catsimatidis of Gristedes supermarket fame, commissioned Dattner Architects as the lead designer for the project -- but not before the city agrees to rezone the western edge of the boardwalk for the second time since 2005.
Retail prices were flat over the past year along the Upper Fifth Avenue corridor from 49th to 60th streets, but jumped sharply along the stretch of Fifth Avenue between 42nd and 49th streets. Asking rents were $2,067 per square foot on Upper Fifth Avenue in the first quarter this year, barely up from the asking rent of $2,033 per square foot in the same period one year ago. In contrast, the stretch on Lower Fifth Avenue had the increase over the past year, rising by 30 percent to $595 per square foot in the first quarter from $458 per square foot in first-quarter 2010. It was the highest price for the district since the first quarter of 2009, when it was $596 per foot.
Vornado Realty Trust is quietly shopping around a small ground-floor space occupied by luxury skin care company Elizabeth Arden's Red Door Spa at 691 Fifth Avenue, where the company has been located for more than 70 years. New Jersey-based Vornado, which has owned the landmarked structure known as the Elizabeth Arden Building since 1998, is asking $3,000 per square foot for the 1,402-square-foot ground-floor location next to clothing retailer Zara.
During the depths of the financial crisis, developers reconsidered and re-imagined their shelved projects, and now, construction is resuming on some of the city's most anticipated towers. Brookfield Office Properties spent construction delays re-engineering a cheaper way to build a deck overlooking the rail yards as it prepares several towers for its 5.4-million-square-foot lot between Ninth and Dyer avenues and West 33rd and 31st streets. Pacolet Milliken Enterprises demolished an entire block along Sixth Avenue between 39th and 40th streets before the downturn, and has now completed the design for a 350,000-square-foot office building at the site.
The final price of the World Trade Center transportation hub, set to house a new PATH station and connect New Jersey commuters to 13 subway lines, is expected to rise to $3.8 billion, $400 million more than last estimated in February of this year. The Bergen Record obtained Federal Transit Administration documents that indicated the current budget would not be adequate for the Santiago Calatrava-designed building meant to replicate a bird in flight. The agency, which is paying for a majority of the hub, also pushed back the expected completion date three months to March 2015. But the Port Authority of New York & New Jersey, which is in charge of the project, said it remained confident that the $3.4 billion budget would suffice, though that's still substantially larger than the $2.2 billion initially budgeted for the project in 2005.
The New York State Department of Labor has released New York City's preliminary employment data for March and the numbers are promising in the construction and retail sectors. The retail industry added 3,600 jobs, perhaps thanks to Daffy's plan for expansion in the city, but also a reflection of a surge of optimism in the sector. Construction added 1,500 new jobs following two months of heavy losses but is still down 1,400 positions for the quarter. In total, New York City created 5,500 new jobs in March, a similar number to February's statistics which were revised upwards from their previously estimated 2,200 positions.
The city's Landmarks Preservation Commission may providea historic designation on nearly 300 tenement buildings and rowhouses in the East Village. The blocks under consideration are bounded by East 2nd and East 7th streets, between First Avenue and the Bowery, plus 10th Street on the northern edge of Tompkins Square Park. Many of the buildings there are 19th-century residences or institutional buildings that had played significant roles in the lives of immigrants during that time period.
The Federal Deposit Insurance Corp. has made its first foray into the commercial mortgage-backed securities market, by selling off about $400 million worth of commercial loans divided into bonds. LNR Property scooped up the riskiest layers of the bonds, originally collected from 13 failed banks. Traditionally the FDIC sold loans mostly in the form of distressed mortgages but with increasing demands for CMBS the agency wants to get into the act.
The state has halted construction on a planned, $23 million hotel for judges in Albany after budget cuts and controversy. The project, which would have built apartments for the seven justices of the state's Court of Appeals and new offices for the Law Reporting Bureau, is suspended at least through the end of the fiscal year, in March 2012, because "in the context of the times, it did not look like the best thing to be doing," according to a spokesperson for the court, which is only in session for 66 days per year.
Steven Pozycki's SJP Properties said it will develop the $190 million new North American headquarters for Panasonic in downtown Newark by 2013, under a joint venture with Matrix Development Group. Panasonic agreed to relocate 1,000 employees from its current Secaucus, N.J. headquarters to One Riverfront Center, located steps from Newark Penn Station and the city's Gateway Center business complex. The electronics giant, which considered Brooklyn and several other locations across the country as alternative sites, was lured by more than $102.4 million in Urban Transit Hub Tax Credits and other incentives designed to locate businesses near major public transit hubs.
Officials from the city's Economic Development Corp. met with the leaders of several Chinese firms yesterday for a Midtown Manhattan real estate office tour that included One Bryant Park and the Empire State Building, part of a larger, recent effort to attract foreign tenants to New York. The city is focusing on companies it sees as having big potential for growth. It has already courted a group of technology start-ups from London, and has plans to host businesses from Singapore and India in the coming months.
The major health care systems are expanding throughout New York City and beyond. The big news this month was the bankruptcy court's approval of the $260 million sale of the Saint Vincent Catholic Medical Center in Manhattan to the Rudin family and North Shore-LIJ. They plan to develop the first stand-alone 24-hour emergency and ambulatory surgical facility in the New York metropolitan area. North Shore-LIJ plans to invest $110 million to renovate and redevelop the O'Toole building between 12th and 13th streets on Seventh Avenue into North Shore-LIJ Center for Comprehensive Care.
Vornado Realty Trust bought out its partners, the California Public Employees Retirement System, Magic Johnson and MacFarlane Partners at the stalled Harlem development site at 1800 Park Avenue near 124th Street. . Vornado has not made public its plans for the site, but it renewed building permits for a 23-story garage, retail and office property. The firm had tried to develop 1800 Park in 2007 but couldn't get enough commitments from anchor tenants. Meanwhile, in his annual letter to investors, Chairman Steven Roth said developer Mel Blum is rejoining the firm and that Vornado intends to pursue projects at 15 Penn Plaza and 220 Central Park South, currently owned by Extell Development.
New York state ruled that Washington Square Village is eligible for inclusion in the National Register of Historic Places, but New York University insists that won't affect its expansion plans. NYU plans to build two new boomerang-shaped buildings on the campus superblock north of Bleecker Street, a staggered, zipper-shaped building on the block south of Bleecker Street and a 14-story building atop the Morton Williams supermarket currently in the area. The historic place designation means that federal and state funding can't be used to demolish or build structures on the location.
A Forest City Ratner executive offered new details about the Barclays Center basketball arena planned for the Atlantic Yards development site. Bob Sanna, the firm's executive vice president of construction, said the arena will be limited to 675,000 square feet -- too small to house a hockey team, as many basketball arenas do. The arena will hold 18,000 people and sit 25 feet below grade, meaning the high-priced ticket-holders won't walk up stairs to their seats.
Gates at the Port Authority Bus Terminal are getting so crowded that after dropping off passengers, many NJ Transit buses return empty to New Jersey to park for the day, causing unnecessary congestion and higher costs. Each day, about 6,000 buses carry nearly 225,000 passengers back and forth from New York to New Jersey and the current facility isn't vast enough to allow for smooth operation of the buses. That's one reason the Port Authority is eager to strike a deal with Vornado Realty Trust, which has held on-again-off-again talks for much of the last decade to build a tower above the bus terminal that would yield $250 million to add gates and improve operations.
New York City-based institutional real estate private equity firm Savanna Investment Management closed its second real estate fund with $550 million in commitments across six transactions totaling 2.2 million square feet. Real Estate Fund II included an all-cash purchase of the 330,000-square-foot tower at 5 Hanover Square where Savanna got a $47 million loan to recapitalize the 25-story office building. Also included in the fund were purchases at 386 Park Avenue South, 104 West 40th Street and 1375 Broadway, which it bought for just $263 per square foot, the senior mezzanine loan at 100 Wall Street, and the senior mortgage on the Kent Swig-owned 80 Broad Street.
A state Supreme Court judge last week approved a foreclosure judgment against the MAve Hotel, a boutique property in the Flatiron District that was developed by Roxy Deli owner Joseph Ben Moha and Livorno Properties principal Ben Zion Suky. The defaulted mezzanine debt is scheduled for auction May 17 at 60 Centre Street. The collateral is being marketed through the New York office of London-based Savills plc,. Providence, R.I.-based Textron Financial., The developers sought a $30 million loan to buy and renovate the former Madison Hotel, which they acquired for $32 million in 2008, into a modern 70-room hotel.
Chelsea's Limelight Marketplace -- the church-turned-nightclub-turned-retail mall on Sixth Avenue and 20th Street -- debuted to much fanfare less than a year ago but has already begun to shed tenants. Foot traffic has plummeted since the initial hype surrounding the property's $15 million conversion, and now there are grumblings of poor management amongst the vendors that remain. Tenants at the 30,000-square-foot venue are mostly small businesses for whom this is their first retail location. Alongside them were more established brands, like LeSportsac and Hunter Boots, both of which have since ditched their spots there. Grimaldi's, the popular Brooklyn-based pizzeria, didn't open at the Limelight until February, by which time things had already started to go downhill.
Kent Swig's stalled condominium conversion project at 25 Broad Street is back in action as a rental building. A court-appointed receiver has tapped developer LCOR to put the 20-story building back on the market . The project offers 305 one- and two-bedroom units, with 35 different floor plans and rents starting at $3,133 and $5,205 per month. There are also hefty concessions: one month's free rent, plus the elimination of broker fees for renters who sign on for one or two years.
CIM Group has filed an application with the Department of Buildings to begin below-ground work at the site of the former Drake Hotel on Park Avenue and 56th Street, signaling the beginnings of the building process at the long-stalled project. It's still unclear what will rise from the site originally assembled by developer Harry Macklowe, who bought the Drake for $418 million in 2006 and demolished it. He defaulted on the debt the following year, and in 2010, Los Angeles-based CIM bought his $510 million construction loan and took over the project, agreeing to keep Macklowe involved. CIM's application currently calls for a five-story development but those plans could easily change.
Hotelier Sam Chang has unloaded the Holiday Inn Express at 126 Water Street in Lower Manhattan for $36.7 million. The buyer was a subsidiary of Hersha Hospitality, for which this will be the 15th hotel in New York City. Chang, who runs the McSam Hotel Group, had purchased the property for $9.5 million in 2005 when it was a two-story retail and restaurant space. The 26-story, 112-room hotel that now stands in its place was completed during the summer of 2010, but by November, the property had been hit with a lis pendens, which marks the beginning of the foreclosure process.
Father and son owners of the Empire State Building, Peter and Tony Malkin, are planning to create a publicly traded company comprised of numerous New York City buildings in their real estate portfolio. At the forefront of the collection of buildings, is the city's most famous tower. Since buying out their partners in the Empire State Building, the Malkins have ratcheted up their efforts, and have opened their wallets, to transform the building from an aging monument with hundreds of small tenants, to a leading destination for major New York City businesses.
U.S. mortgage activity declined by 6.7 percent last week as interest rates continued to inch upward, according to data from the Mortgage Bankers Association through April 8. Both refinancing applications and applications for mortgages to assist with residential purchases declined in volume on a week-over-week basis, by 7.7 percent and 4.7 percent, respectively. Refinancing applications now account for just 60.3 percent of all U.S. mortgage activity, their lowest share since last May. The 30-year fixed-rate mortgage's average contract interest rate, meanwhile, rose to 4.98 percent from 4.93 percent one week ago -- its fourth straight weekly increase.
The state funding entity New York Liberty Development that pulled a $900 million bond offering Monday needs to sell the securities by the end of the year or risk stalling the construction schedule of 4 World Trade Center. Larry Silverstein's Silverstein Properties has enough money to fund the project through the end of the year, but the additional funds are needed to be certain that work proceeds into 2012. "We would need to price those [4 World Trade Center] bonds at least by the end of this year to ensure that construction continues. And we are very optimistic that is going to happen," Ward said.
The new owner of 35 Cooper Square, Arun Bhatia, met with preservation advocates yesterday to hear their concerns about the site's redevelopment. Preservationists want to make sure the 1825 East Village rowhouse will retain its historic integrity. Bhatia bought the building for $8.5 million last year, and filed a demolition application last month. According to DNAinfo, Simeon Bankoff, executive director of the Historic Districts Council, said Bhatia does not currently have a plan for the building and two adjacent lots.
New York City office rents will grow even stronger for the remainder of 2011 and the city will reclaim its number one ranking among the nation's office markets,. Job recovery, which will include 45,000 new office-using positions, combined with just 1.2 million square feet of new construction in New York City (more than half of which stems from Two Gotham Center in Queens) will push rents up at least 5 percent this year.
Mayor Michael Bloomberg joined local officials at the Queens Museum of Art yesterday, at 111th Street and 49th Avenue in Flushing, to kick off a $65 million expansion project. The museum, which was once the site of the United Nations and twice hosted the World's Fair, will grow to 50,000 square feet by 2013. This will double its current size, and make room for more galleries and events.
Lawmakers and mortgage servicers are criticizing a new plan to keep lenders from rushing homeowners into foreclosure. 14 servicers, including Wells Fargo and JPMorgan Chase, have promised the Office of the Comptroller of the Currency that they will change the way they deal with delinquent borrowers. House Democrats and consumer groups are concerned that these agreements, which could take effect in the next few days, won't have the desired effect. Rep. Elijah Cummings, a Democrat who serves on the House Committee on Oversight and Government Reform, thinks regulators can come up with something better. The Democrats will introduce a new bill in the House today that would demand thorough homeowner evaluations and limits on foreclosure fees.
144 Duane Street has hit the market for $45 million. The handsome, 23,000-square-foot limestone building at, built in 1862 as the A.J. Bates department store, was, for the bulk of the 20th century, the home of Goodwear Shoes. Goodwear, much like most of its neighbors on the block between the 1940s and 1970s, was a children's shoe wholesaler, and owned the building from 1946 until 2001. That was the year it was scooped up by a private New York family, gut renovated, and converted for residential use. The three-year project, which preserved the original façade, sidewalk glass lights, heart pine flooring and cast iron columns, resulted in a palatial owner's penthouse triplex, three high-end loft rental apartments and a 6,000-square-foot, ground-floor retail space, currently occupied by perfumery Drom International. The original A.J. Bates sign still hangs in the lobby. Now, the six-story property is up for grabs.
The Open Society Foundations, the non-profit human rights programs founded by George Soros, has signed a letter of intent to lease 160,000 square feet at the Argonaut Building. The building, which sits at 224 West 57th Street, changed hands in September for $85 million when the Beirut investment group that had held a long-term lease on the property converted it into an ownership stake. The new owners, an affiliate of M1 Group, have since been making capital improvements to the building and obtained LEED-Gold certification.
CIM Group is in talks with Esplanade Capital and iStar Financial to buy 47 East 34th Street, the troubled mixed-use tower that is currently leased to corporate housing provider Bridgestreet Worldwide. Istar has been shopping the $84 million in debt on the foreclosed property for months and was engaged in talks with an undisclosed buyer in February, but that deal has since collapsed and the lender recently entered discussions with CIM while preparing to place the building on the auction block. CIM, the Los Angeles-based investment firm, led by founder Richard Ressler, has been on something of a buying spree in New York, scooping up the debt at two iStar projects, William Beaver House and Trump Soho.
The Bank of China has agreed to provide a five-year, $260 million loan to refinance 3 Columbus Circle, the glass-walled office tower where the Moinian Group narrowly skirted a takeover attempt by Stephen Ross' Related Companies earlier this year. Moinian had been trying to renovate the 26-story building when he defaulted on his $250 million mortgage last summer and Related moved to try to wrest control through a foreclosure. SL Green Realty and Deutsche Bank came to Moinian's rescue, helping Moinian to pay off Ross and take back the mortgage. TRD
Square Mile Capital Management and Blackstone Group said they completed a deal to buy a $385 million portfolio of hotel loans from the Federal Deposit Insurance Corp. The portfolio consists of 45 mostly limited-service or select-service hotels, including the Staybridge Suites at 340 West 40th Street in Manhattan and the Fairfield Inn & Suites New York Brooklyn at 181 Third Avenue in the Boerum Hill area of Brooklyn. The firms did not disclose a price, but a source familiar with the deal confirmed that the 45-hotel portfolio, whose loans were all originated by the failed Atlanta-based Silverton Bank, was acquired for 80 cents on the dollar.
Sherwood Equities has purchased a stalled development site near the High Line for $7.3 million and is looking to take advantage of a special city zoning rule that would allow the transfer of the air rights to other West Chelsea properties. In exchange for building a low-scale project, Sherwood would be able to sell off its development rights to a special West Chelsea district created by a zoning rule in 2005.
Time Warner is in talks with Related for another new headquarters on Manhattan's Far West Side. The Related Companies is pitching Time Warner on a piece of its $15 billion Hudson Yards development project, less than 10 years after the company moved into its Time Warner Center headquarters. Related, which built the Time Warner Center, is now said to be offering Time Warner the chance to save money and consolidate operations with a move to Hudson Yards, where the developer is planning 12.9 million square feet of office, retail and residential space and has been on the hunt for corporate anchor tenants in order to begin construction.
SL Green Realty and Vornado Realty Trust have reached a preliminary agreement to recapitalize 280 Park Avenue in exchange for a stake in the 41-story building. The two landlords last month combined their debt positions in the property into a 50/50 joint venture after news broke that the ownership was seeking a capital infusion. It's unclear how much capital the two real estate investment trusts might inject into the 1.2 million-square-foot building, which Broadway Partners and Investcorp purchased for $1.2 billion in 2007, and the deal could still fall through.
Assa Properties has inked a "binding" contract to unload the hotel portion of its bankrupt Cassa Hotel and Residences for $130 million. Assa said the proceeds will be used to pay down the property's debt, after which the condominium portion of the building -- floors 27 through 48, which they say is worth more than $120 million -- will be "firmly in their hands." The buyer was identified in the announcement only as an "international investor,". Earlier this week, Assa's Waterscape Resorts subsidiary filed for bankruptcy protection for the 70 West 45th Street project, which was completed in September 2010 and contains 165 hotel rooms and 57 condos.
Another Financial District office tower is set to undergo a residential conversion. Metro Loft Management is converting 116 John Street, one of the last remaining office towers on John Street's eight-block strip, into a 418-unit rental development. Metro Loft recently bought into a joint venture at the 35-story building with owner Hacienda Intercontinental Realty and now plans to renovate in phases as the office tenants clear out. The 350,000-square-foot building is currently around 40 percent occupied, but the owners are offering tenants "minor incentives" to leave, Metro Loft principal Nathan Berman said. Avinash K. Malhotra Architects, the team behind 2 Gold Street, is overseeing the $100 million project.
A federal grand jury handed down a new 11-count indictment in the state Sen. Carl Kruger ongoing bribery scandal charging the defendants, including real estate developer Aaron Malinsky and lobbyist Richard Lipsky, with conspiracy to commit mail and wire fraud. Malinsky was previously indicted for allegedly making $500,000 in bribes to Kruger, a Democrat from Brooklyn, who later stepped in to help move forward several major real estate developments. Lipsky, who represented various high-profile clients including Forest City Ratner, also allegedly paid off Kruger. Malinsky, a principal at PA Associates, and Lipsky allegedly funneled hundreds of thousands of dollars in bribes to Kruger through a series of bank accounts set up by Manhattan gynecologist Michael Turano, who was Kruger's long-time companion.
Average residential rents in Manhattan were $3,342 in the first quarter of 2011, or $47.62-per-square-foot when taking landlord concessions into account. While the per-square-foot measurement barely edges out last quarter's $47.45 fetching price, it's 20.3 percent more than the $39.58 landlords earned per square foot in the first quarter of 2010. The median rent actually fell from last quarter and a year ago, but landlords made fewer concessions, bringing the overall price up for tenants. Manhattan rental apartments also spent less time on the market -- 40 days, on average -- than they did a year ago. Overall, the number of rentals in Manhattan was up 150 percent from the first quarter of 2010.
Pink Stone Capital, the firm run by Richard Ohebshalom, son of Empire Management's Fred Ohebshalom, purchased the $50 million note on the development site at 111 Washington Street. The loan was purchased for close to par from the New York Community Bank. The Financial District location sits across from the new W hotel and condos, and was supposed to be a hotel designed by Costas Kondylis until the financial crisis sacked the 400,000-square-foot blueprint. Craig Nassi of BCN Development, who was in charge of the hotel plans believes the new owners will turn it into a rental building.
The Harlem Children's Zone broke ground today on a $100 million, five-story, 135,000-square-foot public school and community center building at the St. Nicholas Houses in East Harlem. Multi-million dollar donations from the Department of Education, Goldman Sachs and Google will help fund the project, which will house 1,300 students from the Harlem Children's Zone Promise Academy I.
Silverstein Properties will sell $900 million of fixed-rate municipal bonds next week to refinance the debt issued for its planned 63-story World Trade Center Tower 4. Silverstein had been delaying the scheduled sale since December because of an erratic bond market, but yields on top-rated 30-year municipal bonds have declined since the start of the year, hitting 5.11 percent April 4, down from 5.28 percent Jan. 14,. The tax-exempt Liberty Bonds, originally part of a U.S. program to aid New York City's recovery from the Sept. 11 terrorist attacks, will be sold through a subsidiary of the state's Empire State Development Corp. and marketed by a group of investment banks led by Goldman Sachs.
Wells Fargo has inked a deal to lease 275,000 square feet at 150 East 42nd Street in a 16-year deal that nearly fills the 42-story, Hiro Real Estate-owned tower. The bank had previously been close to signing a 300,000-square-foot lease at 120 Park Avenue. The space it has ultimately settled on, which is between Lexington and Third avenues in the coveted Grand Central submarket, is comprised of 13 floors at the building, where rents range from $55 to $75 per square foot.
A mystery buyer has agreed to buy the Hotel Chelsea for more than $80 million, triumphing over a pool of luminaries that for months have fueled intense speculation about the future of the landmark West 23rd Street property. But the speculation doesn't end here. Previously reported front-runners for the takeover of the legendary hotel included hoteliers Ian Schrager and Andre Balazs, former manager Stanley Bard and Tristar Capital's David Edelstein. (On Monday, a tenant-written blog reported that Edelstein had emerged the victor, which a hotel spokesperson quickly denied). Today, the rumor mill churned out a few fresh names, including Aby Rosen, pop singer Marc Anthony and Google.
HFZ, led by Ziel Feldman, and Israel's Acro Group, have closed on an $80 million deal with Anglo Irish Bank to buy the note at the Setai condominium at 40 Broad Street. Anglo Irish, the struggling Irish lender, put its $147 million construction loan up for sale in 2010 after the sponsor, Zamir Equities, defaulted on the debt. Zamir completed the conversion of the 34-story office building into a condo and sold around 50 percent of the units, but former Attorney General Andrew Cuomo allowed buyers to back out of their contracts and halted future sales.
Felcor Lodging Trust has agreed to buy the Morgans and Royalton hotels from Morgans Hotel Group for $140 million in cash, marking the firms' first-ever New York hotel acquisitions. The Irving, Texas-based real estate investment trust, said it has been looking to buy in New York and other major markets since before the downturn, and was able to find two properties at a price of $496,000 per room, in prime Midtown locations. "This process basically started in 2006 with the plan to reposition and improve the overall portfolio quality," said Stephen Shafer, vice president at Felcor, noting that the firm acquired the Fairmont Copley Plaza for $98.5 million in 2010. The Morgans, a 114-room hotel at 237 Madison Avenue, underwent a $10.3 million renovation in 2008. The Royalton, a 168-room property at 44 West 44th Street, saw a $20.2 million renovation in 2007 and spent $1.5 million on a new lobby bar in 2010.
Fitch Ratings yesterday downgraded a pool of commercial real estate loans led by Stuyvesant Town and Peter Cooper Village, a Florida hotel and a Melville, N.Y. office property. Fitch said the $2.42 billion loan pool, sold under the name Cobalt 2007- C2, has 57 loans of concern, representing 38 percent of the pool, and 15 of the loans are in special servicing, representing 17 percent. The current loan balance is $2.32 billion. The Peter Cooper Village and Stuy Town loan represents the largest percentage of the pool, or 10.3 percent, and remains in special servicing under CW Capital. The 80-acre site, with more than 11,000 units, is currently under new management with Manhattan-based Rose Associates, which declined to comment.
