At an auction yesterday, Lehman Brothers sold the debt on 1107 Broadway to a group led by the Witkoff Grop for about $190 million, according to an article by Eliot Brown yesterday in the Wall Street Journal.
The building was one of two that made up the former International Toy center in Manhattan and the deal comes on the heels of Lehman's sale of its majority stake in 200 Fifth Avenue, the other building, which houses the extremely popular Eatery food establishment.
"We think it is one of the great opportunities we've seen," Steven Witkoff, the firm's chief executive, said in an interview Wednesday evening. He said he intends to turn the 1107 Broadway building, which sits on Madison Square Park, into high-end condos, the article said.
The sales come as conditions are becoming rather favorable for sales in major cities like New York, where real estate values have been rapidly pushed up by long lines of investors seeking deals, even as rents show only modest increases. While prices are still below the 2007 peak, they're getting close to that level.
At 1107 Broadway, the article continued, "Lehman lent more than $300 million to a venture led by Tessler Developments, which aimed to turn the mostly-vacant building into condos. The project never got off the ground, the owners defaulted on the debt and complex litigation with Lehman ensued."
Seeking an exit in which the owners agree to hand over the keys and not tie up the property in court, Lehman agreed to a deal in which the Tessler group would be paid $19 million, and 50 cents of every dollar the property fetches at auction above a minimum bid of $161.5 million, according to court records, the article said.
In the end, Lehman had more than $220 million in unpaid balance on its loans.
The 16-story, 337,000-square-foot building at 1107 Broadway was erected in 1915 and was designed by H. Craig Severance and W. Van Alen. It replaced the Albemare Hotel and it was joined to 200 Fifth Avenue by a skybridge in 1968.
The 670,592-square-foot building at 200 Fifth Avenue was built in 1909 and designed by Maynicke & Franke. It replaced the Fifth Avenue Hotel that was opened in 1859 by Amos F. Eno and was initially known as 'Eno's Folly' because the area was considered too far uptown.
Tessler Developments acquired 1107 Broadway for about $235 million from the Chetrit Group that had initially planned to convert the two-building complex, which it called Madison Park West, to about 460 residential condominium apartments, about two-thirds of which would be in the 200 Fifth Avenue building.
At one point, the Chetrit Group, contemplated creating a 1,300-room hotel and several hundred small rental apartments in the two buildings and there was considerable controversy over the fate of the toy industry in the city.
Chetrit had brought the two buildings in 2005 for about $355 million from a partnership headed by Peter Malkin.
Subsequently, the Chetrit Group sold the 200 Fifth Avenue building to L&L Holding Company LLC for about $480 million.
The building was one of two that made up the former International Toy center in Manhattan and the deal comes on the heels of Lehman's sale of its majority stake in 200 Fifth Avenue, the other building, which houses the extremely popular Eatery food establishment.
"We think it is one of the great opportunities we've seen," Steven Witkoff, the firm's chief executive, said in an interview Wednesday evening. He said he intends to turn the 1107 Broadway building, which sits on Madison Square Park, into high-end condos, the article said.
The sales come as conditions are becoming rather favorable for sales in major cities like New York, where real estate values have been rapidly pushed up by long lines of investors seeking deals, even as rents show only modest increases. While prices are still below the 2007 peak, they're getting close to that level.
At 1107 Broadway, the article continued, "Lehman lent more than $300 million to a venture led by Tessler Developments, which aimed to turn the mostly-vacant building into condos. The project never got off the ground, the owners defaulted on the debt and complex litigation with Lehman ensued."
Seeking an exit in which the owners agree to hand over the keys and not tie up the property in court, Lehman agreed to a deal in which the Tessler group would be paid $19 million, and 50 cents of every dollar the property fetches at auction above a minimum bid of $161.5 million, according to court records, the article said.
In the end, Lehman had more than $220 million in unpaid balance on its loans.
The 16-story, 337,000-square-foot building at 1107 Broadway was erected in 1915 and was designed by H. Craig Severance and W. Van Alen. It replaced the Albemare Hotel and it was joined to 200 Fifth Avenue by a skybridge in 1968.
The 670,592-square-foot building at 200 Fifth Avenue was built in 1909 and designed by Maynicke & Franke. It replaced the Fifth Avenue Hotel that was opened in 1859 by Amos F. Eno and was initially known as 'Eno's Folly' because the area was considered too far uptown.
Tessler Developments acquired 1107 Broadway for about $235 million from the Chetrit Group that had initially planned to convert the two-building complex, which it called Madison Park West, to about 460 residential condominium apartments, about two-thirds of which would be in the 200 Fifth Avenue building.
At one point, the Chetrit Group, contemplated creating a 1,300-room hotel and several hundred small rental apartments in the two buildings and there was considerable controversy over the fate of the toy industry in the city.
Chetrit had brought the two buildings in 2005 for about $355 million from a partnership headed by Peter Malkin.
Subsequently, the Chetrit Group sold the 200 Fifth Avenue building to L&L Holding Company LLC for about $480 million.
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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