The unsold residential condominium units at the 50-story, brown-brick residential tower known as Sheffield57, which is just to the west of the Hearst Tower designed by Sir Norman Foster on the southwest corner of 57th Street and Eighth Avenue, were sold at a foreclosure auction yesterday for a reported price of $20 million.
The buyer was Fortress Investment Group LLC, a private-equity firm that had previously bought the $70 million controlling senior slice of the property's mezzanine debt. According to an article by Lingling Wei and Nick Timiraos in yesterday's edition of The Wall Street Journal, Fortress also "paid off the remaining $32 million left on the first mortgage, which had been packaged and sold as commercial-mortgage-backed securities."
One of the city's largest apartment buildings with about 845 units, the Sheffield at 322 West 57th Street, was erected as a rental apartment building in 1978 by Rose Associates and for many years was a lonely high-rise pioneer in the northwest corner of midtown.
When it was erected, this very big apartment tower was in something of a no-man's land. Although its immediate surroundings were not unattractive its neighborhood left much to be desired in terms of liveliness, amenities and urban grace.
The headquarters of Channel 13 were nearby but so were automobile salesrooms, the oppressive and unattractive New York Coliseum, the city's former convention center, and Eighth Avenue was the city's preeminent boulevard of porn.
A generation later, however, this location is one of the most vibrant in the city.
The 50-story, brown-brick building has a driveway that runs from 57th to 56th Street, a large plaza and overlooks the landscaped gardens of the very handsome Park Vendome apartment complex just to its west that fronts on both 57th and 56th Streets.
The Sheffield, which was designed by Emery Roth & Sons, has a double-height lobby with a concierge, a laundry on every floor, valet service, a health club with swimming pool, a rooftop paddle tennis court and a 345-car garage. The building also has about 109,000 square feet of office space and some retail space.
In 2005, it was sold by Rose Associates to Swig Burris Equities, YL Real Estate Developers and S & H Equities for $418 million for conversion to a condominium.
The group took out a $400 million first mortgage for the 50-story rental building from a lending unit of Credit Suisse Group. The group also borrowed $240 million in mezzanine debt and put in about $70 million in equity, using the funds to convert the rental units into condos.
The conversion, however, did not go smoothly and at one point Yair Levy of YL Real Estate Developers hit Kent Swig of Swig Burris Equities with an ice bucket. Litigation bogged the conversion down and the group defaulted on the mortgage.
In the conversion, the number of apartments was reduced.
The top two floors of the tower include a fitness center, a spa, a Pilates studio, a landscaped sun deck and glass-walled swimming pool that is open in the summer and enclosed in the winter, a private restaurant, a screening room, a children's playroom and a lounge offering breakfast and evening cocktails.
According to the Wall Street Journal article, Mr. Swig's group sold "fewer than half the 597 condo units in the project." The article said that the auction was held "at the New York office of law firm Allen & Overy, which represents Fortress, the private-equity firm was the only bidder, with a bid of $20 million." "Fortress, it continued, "purchased the slice of senior mezzanine debt from a fund managed by Guggenheim Partners. Holders of the more-junior slices of the mezzanine debt saw their stakes essentially become worthless. These holders included J.P. Morgan Chase & Co., New York Life Insurance Co. and Gramercy Capital Corp....A spokesman at New York Life said the company had only 'a modest interest' in the mezzanine debt. An official at Gramercy didn't return requests for comment."
The buyer was Fortress Investment Group LLC, a private-equity firm that had previously bought the $70 million controlling senior slice of the property's mezzanine debt. According to an article by Lingling Wei and Nick Timiraos in yesterday's edition of The Wall Street Journal, Fortress also "paid off the remaining $32 million left on the first mortgage, which had been packaged and sold as commercial-mortgage-backed securities."
One of the city's largest apartment buildings with about 845 units, the Sheffield at 322 West 57th Street, was erected as a rental apartment building in 1978 by Rose Associates and for many years was a lonely high-rise pioneer in the northwest corner of midtown.
When it was erected, this very big apartment tower was in something of a no-man's land. Although its immediate surroundings were not unattractive its neighborhood left much to be desired in terms of liveliness, amenities and urban grace.
The headquarters of Channel 13 were nearby but so were automobile salesrooms, the oppressive and unattractive New York Coliseum, the city's former convention center, and Eighth Avenue was the city's preeminent boulevard of porn.
A generation later, however, this location is one of the most vibrant in the city.
The 50-story, brown-brick building has a driveway that runs from 57th to 56th Street, a large plaza and overlooks the landscaped gardens of the very handsome Park Vendome apartment complex just to its west that fronts on both 57th and 56th Streets.
The Sheffield, which was designed by Emery Roth & Sons, has a double-height lobby with a concierge, a laundry on every floor, valet service, a health club with swimming pool, a rooftop paddle tennis court and a 345-car garage. The building also has about 109,000 square feet of office space and some retail space.
In 2005, it was sold by Rose Associates to Swig Burris Equities, YL Real Estate Developers and S & H Equities for $418 million for conversion to a condominium.
The group took out a $400 million first mortgage for the 50-story rental building from a lending unit of Credit Suisse Group. The group also borrowed $240 million in mezzanine debt and put in about $70 million in equity, using the funds to convert the rental units into condos.
The conversion, however, did not go smoothly and at one point Yair Levy of YL Real Estate Developers hit Kent Swig of Swig Burris Equities with an ice bucket. Litigation bogged the conversion down and the group defaulted on the mortgage.
In the conversion, the number of apartments was reduced.
The top two floors of the tower include a fitness center, a spa, a Pilates studio, a landscaped sun deck and glass-walled swimming pool that is open in the summer and enclosed in the winter, a private restaurant, a screening room, a children's playroom and a lounge offering breakfast and evening cocktails.
According to the Wall Street Journal article, Mr. Swig's group sold "fewer than half the 597 condo units in the project." The article said that the auction was held "at the New York office of law firm Allen & Overy, which represents Fortress, the private-equity firm was the only bidder, with a bid of $20 million." "Fortress, it continued, "purchased the slice of senior mezzanine debt from a fund managed by Guggenheim Partners. Holders of the more-junior slices of the mezzanine debt saw their stakes essentially become worthless. These holders included J.P. Morgan Chase & Co., New York Life Insurance Co. and Gramercy Capital Corp....A spokesman at New York Life said the company had only 'a modest interest' in the mezzanine debt. An official at Gramercy didn't return requests for comment."
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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