The Related Cos. and Deutsche Bank AG have acquired the $250 million mortgage on the 26-story office building at 1775 Broadway between Broadway and Eighth Avenue, which is known now as 3 Columbus Circle, and are considering demolishing it to convert part of it to retail space for Nordstrom and part of it residential condominiums, according to an article today at wsj.com by Lingling Wei and Eliot Brown.

The article said that "according to people familiar with the matter," Related "has been talking to Nordstrom about its intent to foreclose on 3 Columbus Circle then demolish it and building a new tower in its pace," adding that Related "is thinking about putting apartments on top of the store and will seek architects to design the building in coming weeks."

The building contains about 700,000 square feet of office space and is, according to the article, "one of the crown jewels in the real estate empire belonging to Joe Moinian, who bought many properties near the market's peak."

The building's brown brick facade is in the process of being replaced by glass. For several years, the building was the headquarters of Newsweek magazine. It is across from One Central Park Place, the Hearst tower and the Museum of Arts & Design and it is diagonally across Eighth Avenue from the Time Warner Center of which Related was a co-developer.

"Mr. Moinian has been trying to hold on to the building and was close to restructuring its $250 million mortgage," the article said, adding that "Mr. Moinian - a 56-year-old Iranian-born developer who had his first job in a restaurant in Forest Hills, Queens, after coming to the U.S. at 16 - went on a buying spree during the boom years. His portfolio grew to over 20 million square feet, but it left him with a bad hangover of over-leveraged buildings that he has been attempting to save. So far he has succeeded in restructuring most of his problem loans."

The article indicated that "The tower is only 16% occupied, according to real-estate-services firm CoStar Group Inc."

"What's unusual about 3 Columbus Circle," the article said, "is that the Related venture bought at close to full face value the $250 million mortgage debt on the tower from the firm overseeing the loan, the people said. The move indicates that the Related group is determined to win control of the building in a bet that the property is worth more than the mortgage debt."

"Mr. Moinian," the article added, "could still fend off the foreclosure attempt by paying off the mortgage debt. But that's going to be tough in a credit-starved real-estate market. Mr. Moinian also could buy time by seeking bankruptcy protection for the property, real-estate experts say."

A 2008 article by David W. Dunlap in The New York Times noted that the Gensler recladding would "obliterate evidence of the building's history and heritage as a hub of Automobile Row."

"For now, a palisade of three-story Ionic columns, supporting a neo-Classical entablature, surrounds the base of the structure. This is a visible vestige of the Colonnade Building, designed by William Welles Bosworth and developed by John A. Harriss, a deputy police commissioner who also invested in real estate. Describing the plan in February 1921, The Times noted that the columns would not be flattened in order to increase the size of the storefronts between them....In 1922, the Hudson Motor Car Company leased the Colonnade Building's principal storefront, at Broadway and 57th Street, as a sales room for its Essex line of automobiles. (In recent decades, this space was the home of Coliseum Books....) Until 1926, the three-story colonnade was all that stood on the site. Then, Shreve & Lamb designed a 22-story addition, principally for the General Motors Corporation....General Motors projected its name on the skyline from the top of the building....Eventually, G.M. occupied almost all of the building. It stayed there until 1968, when it moved across town to Fifth Avenue."