Macklowe Guns to Take Back 510 Madison
Dana Rubinstein Dec. 9, 2009, 8:32 a.m.
Harry Macklowe—the self-made real estate tycoon whose ill-fated $7 billion 2007 purchase of a portfolio of New York skyscrapers rendered him a symbol of the perils of overleveraging—is trying to reassert some control.
Mr. Macklowe is competing against fellow tycoon Douglas Durst, among others, in a bid to buy back the mortgage on one of his last remaining marquee New York scrapers: the brand-new, 30-story 510 Madison Avenue, according to multiple industry sources.
The shimmering glass tower’s origins lie in a far happier real estate era, a time when overheated hedge funds, private-equity firms and the attorneys that serviced them were devouring more and more space, and paying more and more money for the privilege.
And so it must have seemed wise to add yet another skyscraper to Manhattan’s teeming skyline, even if no tenants promised beforehand to fill the space—much as it must have seemed wise to New Jersey developer Steve Pozycki to build Manhattan’s other on-spec skyscraper, 11 Times Square, at Eighth Avenue and 42nd Street.
But then the economy imploded, and the real estate market with it. Tenants vanished. And 510 Madison Avenue, aside from one retail tenant, sits empty (the status of its one-floor lease with hedge fund Jay Goldman is still tied up in litigation). So, too, does 11 Times Square.
Now, the first mortgage holder, Union Labor Life Insurance Company, is said to be asking more than $150 million for its building-related debt, which was originally valued at over $250 million, according to property records.
Should Mr. Macklowe, a college dropout who hustled himself out of anonymity as a commercial broker in the 1960s, win the informal bidding process, he will solidify his now-tenuous hold on his last undisputed gem at a bargain-basement price.
The mortgage holder wouldn’t comment for this story. Mr. Durst, in his typically coy fashion, said of his reputed bid, “We have heard the very same rumor.”
And Mr. Macklowe? The once-ballyhooed dealmaker, who lost the GM Building in the wake of that $7 billion deal gone bad and who surely doesn’t want to lose arguably his last midtown trophy, declined to comment.