BankUnited Sues Harry Macklowe Over Alleged 310 East 53rd Street Retail Condo Default
By Celia Young November 3, 2022 2:07 pm
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Harry Macklowe allegedly defaulted on a $14.2 million loan on the 7,100-square-foot retail condominium at 310 East 53rd Street, according to a lawsuit filed by lender BankUnited in New York County Supreme Court on Wednesday.
BankUnited sued Macklowe and his entity, Gray-Line Development, to get back the roughly $11.94 million that’s left on the loan, plus interest, as well as $10.5 million in lost rent the lender claimed Macklowe promised to cover after the building lost its retail tenant Walgreens in January, according to the lawsuit.
A spokesperson for Macklowe’s Macklowe Properties declined to comment. BankUnited and its lawyers did not immediately respond to requests for comment.
Macklowe controls the retail condo on the corner of East 53rd Street and Second Avenue under a 99-year lease he signed in 2006, according to the lawsuit. He took out a combined $7.5 million in loans secured by the space in 2008 and 2010 and got $6.7 million in fresh debt in 2013 after he consolidated and refinanced the past loans with BankUnited, court documents said.
But to secure the new debt, BankUnited claims that Macklowe agreed to cover the payments on the loan plus the Walgreens rent if the retailer decided to abandon its outpost. When Walgreens left in January, BankUnited claims Macklowe failed to make its monthly payment of $67,000.
The bank demanded Macklowe immediately repay the principal of the loan and the rent in April, but Macklowe still hasn’t paid, according to court records.
It’s unclear if Macklowe found a new tenant to replace Walgreens. CBRE’s Gary Trock, the space’s broker, declined to comment.
The suit isn’t Macklowe’s first run-in with the courts. Last year, the condominium board of the super tall residential tower 432 Park Avenue sued Macklowe Properties, among the building’s other owners, claiming that more than 1,500 design defects caused the tower to flood and its elevators to get stuck.
The sponsors hit back in court documents in December 2021, asserting the property is “without a doubt safe” and that the condo board’s suit exaggerated the defects, Commercial Observer reported.
Celia Young can be reached at cyoung@commercialobserver.com.
