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NEW YORK | 432 Park Avenue (Drake Hotel dev.) | (1,396) FT / 432 M | 89 FLOORS
http://www.nypost.com/p/news/busines...uOt1pnLp7MKbQI
Drake's new take Macklowes, new partner buy out 10 investors By LOIS WEISS January 6, 2010 The fat lady hasn't yet sung for the former Drake Hotel site -- or the Macklowe family's plans to develop it. Harry Macklowe and his son, William, appear to have come up with a way to keep control of the vacant Midtown lot on which the Drake Hotel used to sit and has since become an undeveloped eyesore and symbol of the Macklowes' financial troubles. The Macklowes' development company, Macklowe Properties, is teaming up with Los Angeles-based private-equity firm CIM Group to pay off 10 debtholders who hold slices of a $510 million loan on the property as the family apparently looks to stage a bit of a New York City real estate comeback. The agreement with CIM would enable the Macklowes to move forward with their development plans for the Drake site, which sits on Park Avenue between 56th and 57th streets and is where the Macklowes want to construct a 60-story, 600,000 square foot tower . Macklowe in 2006 spent more than $440 million buying the Drake Hotel, and has since torn it down. Along the way he has also assembled a collection of adjacent properties and air rights along East 57th Street, creating what some have called an awkward front for a future development that was to include ground-level retail as well as an office tower. Macklowe had trouble acquiring all of the buildings needed to create a space attractive for a major retailer such as Nordstrom, which at one point was in talks to open its first New York City store there. Among many in real-estate circles, the Drake site is considered to be one of the city's most desirable locations, though these days it is little more than a vacant lot bounded by plywood walls. |
http://online.wsj.com/article/SB1000...749032584.html
http://s.wsj.net/public/resources/im...0105223320.jpg WSJ slideshow Quote:
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They demolished THAT?!
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wasn't there a movie filmed in this building a couple years ago?
sab :( |
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A NY Times article from a couple of months ago...
http://www.nytimes.com/2009/11/18/re...er=rss&emc=rss Drake Hotel’s Prime Space Remains Undeveloped http://graphics8.nytimes.com/images/..._CA0/popup.jpg An opening in the fence allows a view of the lot where the Drake Hotel once stood on Park Avenue at 56th Street. http://graphics8.nytimes.com/images/..._CA1/popup.jpg Louis Verde, of Turnbull & Asser, said: "We're not going anywhere." By TERRY PRISTIN November 17, 2009 Enclosed by a dark brown fence, the weedy lot at Park Avenue and 56th Street in Midtown Manhattan is a conspicuous reminder of how ambitions were shattered in the recent real estate debacle. This vacant site, where the Drake Hotel once stood, is likely to leave a gash in the middle of the nation’s costliest office submarket for years to come, real estate specialists say. Manhattan has 79 other stalled construction sites but probably none to rival the Drake in location. “It is inarguably the best development site in the country and possibly the world,” said Woody Heller, an executive managing director at Studley, a real estate brokerage company. Just north of the site is 450 Park Avenue, an office building that traded in 2007 for a record price of $1,566 a square foot. In 2006, the New York developer Harry Macklowe bought the elegant Drake Hotel, opened in 1926, for $418 million, or about $847,000 a room. He tore it down the next year and planned to replace it with a 550,000-square-foot L-shaped building with luxury condominiums, an even more elegant hotel and Manhattan’s first Nordstrom store. The cost of acquiring additional properties to assemble the site increased the project’s cost to at least $724 million, or about $1,300 a square foot before construction, brokers said. They say it is difficult to gauge its current value because the market in Manhattan has fallen so far, and few transactions have occurred. To shore up his position in the deal, Mr. Macklowe made a huge personal investment in the project by paying off $156.3 million in certain loans in October 2007, which raised his stake in the project to $250 million. In court papers, Mr. Macklowe and his son, William, now the chief executive of the family business, said they invested their personal assets in the Drake site because of repeated assurances from Deutsche Bank that the bank would refinance their loans when they matured in November 2007. But the loans were not refinanced, and the Macklowes defaulted. Not long afterward, the Macklowes lost a major portion of their real estate empire. Without a fight, they gave up control of seven Midtown office buildings that they had acquired at the peak of the boom, and a few months later, they sold their prized General Motors Building, on Fifth Avenue at 59th Street. But the Macklowes are tenaciously clinging to the Drake project and have told people they are determined to see it developed, most likely with a financial partner, even if they have to wait for years. Several brokers said the continuing involvement of Mr. Macklowe, who is considered highly creative but also litigious and a tough negotiator, adds a layer of complications. In August 2008, Mr. Macklowe’s longtime lender, Deutsche Bank, sued to foreclose on loans for the hotel site and for nearby properties. Mr. Macklowe bought unused development rights, known as air rights, to eight townhouses on 57th Street to be able to add height to the building. He also sought to buy the townhouses themselves to give Nordstrom frontage on 57th Street opposite the Four Seasons Hotel but was only partly successful. Mr. Macklowe paid a record average price of $520 a square foot for the air rights, according to a case study by two recent graduate students at Columbia, Travis B. Olsen and Evan Woolley. If the Macklowes’ construction plans were complex, the financing was even more convoluted. Deutsche Bank sliced the $559 million Drake loan into 21 separate pieces, each with a different level of risk. The bank kept about $12 million of the loan and sold the rest to eight investment groups, earning tens of millions of dollars in fees. Citing a lawsuit, the Macklowes declined to comment publicly on the Drake. But in court documents, they accused the bank of lying to them and betraying their trust “by making false promises it never intended to keep.” Sounding like a jilted lover, they said the bank “strung Macklowe Properties along until Deutsche Bank got what it wanted, then refused to honor its commitments — benefiting handsomely from its willfully dishonest, deceptive, bad faith and fraudulent conduct at Macklowe Properties’ expense.” If the bank succeeds in foreclosing, the Macklowes’ investment “will almost certainly be a total loss,” they said. Deutsche Bank did not respond to requests for comment. Despite the foreclosure suit, the Macklowes hold some cards, brokers say. In April 2007, they agreed to pay $47.5 million for a townhouse at 46 East 57th Street, where the luxury jeweler Buccellati is a tenant. The sale has not closed. If it does, it is possible that the Macklowes may successfully argue that this building — and others — are not part of the loan collateral, thus ensuring a role for themselves, according to real estate executives familiar with the Drake site. In addition to leaving a big hole on Park Avenue, the stymied development has also had repercussions for a fancy shopping strip around the corner from the site that was intended to be included in the Macklowe project. The town houses are still standing, but several of the storefronts are vacant. At 44 East 57th Street, which was the home for 60 years of Dalva Brothers, a store that specialized in 18th-century furniture, a cracked window is patched with duct tape and cardboard boxes are piled up inside. The Macklowes paid Dalva $2.2 million to move uptown. They also paid $19.2 million to buy the lease of the Swiss watchmaker Audemars Piguet at 40 East 57th Street and move the store to the north side of 57th Street. But the Macklowes did not succeed in putting all the parts together. Nordstrom, which had signed a letter of intent to build a store with 253,500 square feet, backed out after the Macklowes failed to acquire all the buildings needed to create the 57th Street entrance. One holdout is Turnbull & Asser, a men’s clothing store where shirts start at $275. It had been in contract to collect $33 million for moving from 42 East 57th Street to another town house, according a document prepared by Cushman & Wakefield. But in May 2008, the owner of Turnbull & Asser, Ali al-Fayed, exercised his option to buy the building from the previous owner for $31.5 million. Now, said Louis Verde, the manager, “we’re not going anywhere.” Another holdout is Jacob the Jeweler at 50 East 57th Street, which reportedly demanded $100 million to move. The company had no comment. Last year, iStar Financial, a real estate investment trust in New York that holds the largest chunk of the senior debt on the Drake, tried to sell its $224 million note at a discount. When the bids came in well below the $160 million asking price, iStar took it off the market. But Jeffrey W. Baker, an executive managing director at Savills, a mortgage brokerage, said prospects for such deals were improving. Several of his overseas clients have shown interest in acquiring the Drake loan with the intention of gaining control of the property, he said. “While the complexities and risks of the deal have reduced the number of potential buyers significantly,” Mr. Baker said, “the growing consensus overseas is that market conditions are near bottom and that now is the time to acquire trophy U.S. assets at bargain prices.” |
This is a mess that I’d like to see be fixed sooner rather than later. I’m not so much bummed out about losing the Drake as I am there just being an empty lot along Park Avenue. Hopefully with some help from the from the private equity firm, Harry can get himself together and get to work.
On a side note: Impressive figures on 450 Park, even if they are a few years old. Didn’t realize it was such a ‘hot’ tower considering it looks empty as a shell every time I walk past it. |
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According to curbed.com, looks like Macklowe has lost the site. More on that later...
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There is a god!!!
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http://www.businessweek.com/news/201...cim-group.html
Macklowe Sells Drake Hotel Site on Park Avenue to CIM Group January 28, 2010 By David M. Levitt (Bloomberg) -- New York developer Harry Macklowe sold a prime Park Avenue development site to an affiliate of CIM Group for $305.4 million, city records show. Once home to the Drake Hotel, the parcel at Park and East 56th Street in Manhattan lies in one of the world’s 25 most expensive office districts and about two blocks from the world’s priciest shops. Macklowe sold the Drake site along with four adjacent properties that could provide access to frontage on East 57th Street, near stores including Chanel Inc., Hermes and Louis Vuitton. He bought the Drake in 2006 and demolished it. In 2008, Macklowe defaulted on a $513 million loan tied to the property, according to a lawsuit filed on behalf of lenders including Deutsche Bank AG. He recently planned to buy out creditors as part of a partnership with Los Angeles-based CIM, a person familiar with the situation said on Jan. 5. Macklowe declined to comment on the sale to CIM, said Steve Solomon, his spokesman, leaving unanswered the question of whether Macklowe retains an interest in the property. CIM had no immediate comment, said Bill Mendel, a spokesman for the company. Macklowe intended to build a high-rise tower on the site that could have contained retail, condominium apartments and a new hotel, according to court papers. The property sale was reported earlier today by TheRealDeal.com. |
No sale with ever undo the damage done by the scumbag that is Harry Macklowe.
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Tmi;)
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The NY Times article provided by NYguy was interesting. This article stated a high rise condo and a Nordstrom was proposed.
My prediction is a 500-700 footer will be built with condos starting in the millions, the location is Park Avenue after all. |
hopefully it's over 700 feet for it could have some nice views of the future great 57th street canyon.:tup:
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Anything to just fill that hole. I do think though that Carnegie 57 will act as a confidence boost to developers planning other high end residential projects throughout the city. Whether or not it has direct influence on this particular one remains to be seen, but you never know.
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If Macklowe builds a slim hotel-condo, this tower could be around 1,000 feet tall. Torre Verre is around 1,000, and it has about 650,000 sf.
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Demolition of some of the small buildings on 57th Street is imminent. Presumably, something will start rising here in 2011.
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It's sad to see these buildings go. On this site could rise either a nearly 300m residential or a 200m office.
http://farm5.static.flickr.com/4131/...90065ec7_b.jpg Derek2k3 |
http://therealdeal.com/newyork/artic...st-57th-street
Harry Macklowe to go head-to-head with subtenant over eviction at former Drake site October 06, 2010 By David Jones Harry Macklowe and 38 East 57th StreetA state Supreme Court judge ordered developer Harry Macklowe to face off in arbitration against a retail subtenant that filed a $20 million lawsuit to block an eviction at 38 East 57th Street, a parcel at the site of the former Drake Hotel. The subtenant, luxury watch seller Franck Muller Retail, filed suit Sept. 24, alleging Macklowe and his Los Angeles-based partners, CIM Group, served a bogus eviction notice as a pretext to empty the building and proceed with their controversial hotel and condominium project. Macklowe bought the former hotel site at Park Avenue and 56th Street for $418 million in 2006, and planned to demolish several buildings to convert the site into a hotel, with retail space and condominiums. In November 2008, Macklowe paid $5.35 million to buy out the building lease from Sovereign Partners, which leased out the entire building. Franck Muller originally signed the sublease for the ground floor and mezzanine space in 2005, and the sublease is not scheduled to expire until 2018, according to court documents. Macklowe also faced foreclosure from Deutsche Bank after defaulting on his loans at the site, leading him to eventually sell the lease and the property to a CIM affiliate and bring CIM in as a partner. "Like Brer Rabbit in the Briar Patch, there is nothing Macklowe and his partner CIM would welcome more than being able to invent a 'default' which would in turn provide pretextual grounds for a wholly consensual 'eviction,' and related wrongful termination of plaintiff's sublease," wrote Alexandra Wald, attorney for Franck Muller. Wald said the retailer has spent more than $1.25 million to renovate the space since moving in, and made it more attractive for customers. Wald said the retailer received a letter dated Sept. 17 stating that it had failed to pay more than $462,000 in rent since April 2010. The letter states the amount of the rent owed is based on appraisals by the landlord. The retailer claims that the landlord has conspired with Macklowe and CIM not to pay the rent, according to court records. "Upon information and belief, either CIM's principals or their business partner Macklowe have caused the landlord, an affiliate of CIM, not to pay the purportedly demanded rent increase on the ground lease to manufacture a sham and consensual default by the landlord," lawyers wrote in the complaint. "CIM and/or Macklowe will then cause the [owner of the ground lease] to seek to terminate the ground lease and landlord's subleases [including plaintiff's lease]." Attorney Richard Claman, representing CIM and Macklowe, argued that Franck Muller signed a lease for rent that was well below market and knew, or should have known, that the lease agreement called for a substantial increase in the ground lease payments in 2010. He said that based on two new appraisals by Jerome Haims Realty and Cushman & Wakefield, the fair market rent for the space is $1.4 million per year. "FMR cannot properly insist that the net lessee remain in business, at a loss for the next eight years, just to protect FMR's below market rent," Claman wrote. Macklowe declined to comment. |
wow those are absolutely beautiful town homes. It is a shame they are going to be demoed (as well as the hotel was). Whatever replaces it better be pretty damn tall and awesome
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are there any renderings???? and whats the status?
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No.
First it was to be hotel-condos, then an office tower, now hotel-condos again. Residential is preferable to office space because the former will result in a much taller tower. This should be at least 275m. |
From the 15 Dec. 2010 NY Post:
In other CIM news, sources tell us the LA-based fund that also partnered with Harry Macklowe at the Drake site has reached a confidential settlement with its retail tenant, Franck Muller. The watchmaker did not want to move out of the tony, East 57th Street townhouse that sits across from the Four Seasons Hotel. But it is circled for demolition as part of the planned Drake redevelopment. "Assume the tenant will be moving out [after the holidays]," said one source familiar with the terms of the mediation agreement. Lawyers for both sides declined to comment, and a wrap-up court hearing is scheduled for next year. Read more: http://www.nypost.com/p/news/busines...#ixzz18B9FyP3V |
http://therealdeal.com/newyork/artic...r-42-5-million
CIM Group buys townhouse at Drake site January 05, 2011 11:50AM By Adam Pincus Harry Macklowe and 46 East 57th StreetCalifornia private equity firm CIM Group, which paid off lenders to take control of Harry Macklowe's former Drake Hotel site at Park Avenue and 56th Street for $305 million, has acquired an additional property adjacent to the assemblage. The CIM Group paid $42.5 million for the 18-foot wide townhouse at 46 East 57th Street, city records filed yesterday show. The California company picked up the five-story, 57th Street property through six separate deeds, with values between $417,057 and $14.2 million, city records show. The five-story building would modestly widen the frontage Macklowe put together on 57th Street, if it is added to the site. An outside spokesperson for CIM Group declined to comment, other than to confirm the sale price. Woody Heller, an executive managing director with commercial firm Studley, advised CIM Group on the sale. He declined to comment on the transaction. Macklowe bought the Drake Hotel at 434 Park Avenue in 2006 for $418 million and the next year tore it down with plans to rebuild a hotel, residential and commercial development. He acquired four of the seven properties along 57th Street in order to give the site frontage on the high-profile street. But Macklowe defaulted on the project's loans, and Deutsche Bank representing a group of lenders filed to foreclose in August 2008. CIM Group took over the site in January 2010, but real estate insiders say Macklowe is still involved in the project today. According to property records and foreclosure filings, by 2008 Macklowe controlled 38, 40, 44 and 50 East 57th Street, but not 42, 46 and 48 East 57th Street. This new addition widens access on the street, but property records indicate CIM Group still does not control 42 and 48 East 57th Street, preventing a new development from building a cohesive street wall on the block. |
I think it’s safe to say we have a ways to go before any new development.;)
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I think that something will start rising in 2011.
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^^^ There’s been no indication that’ll happen, and based on this article it sounds like they have their hands full in working out the site.
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The high-end residential real estate market is very strong, and the only new product underway is Carnegie 57. Clearly, the owner of this site is preparing to do something, and one would assume that it would want to be among the first developers with a product to sell.
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I hope we get a 1000-foot tower on this site. The zoning would allow for a very tall, slender tower.
And can you imagine the prices? This has to be one of the best development sites on the planet. Park Avenue already has sold apartments in the $40-$50 million range, and these are mostly prewar coops with very strict house rules and a tough interview/approval process. I think any residential units at this address could break Manhattan sales records. |
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http://www.altergroup.com/blog/wp-co...owerres3cg.jpg http://www.altergroup.com/blog/wp-co...owerres3cg.jpg |
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I think we can do a hell of a lot better than that. But anything tall and elegant will be an improvement over the current site. |
It's one of the top locations in Manhattan for a residential, and I'm glad plans for the office tower were dropped. With the Tower Verre and Carnegie 57 showing the way, it's time for an attention grabbing residential tower on the east side.
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At least something to give TWT a little company in that category, speaking of which I’m still waiting on his ‘next big thing’ for the city. Between these three Midtown projects, plus the two Downtown, the Manhattan residential market is heating up with regards to height. It’s almost as if one is trying to outdo the other.
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Besides, that site is too small for contemporary Class A office space, which typically requires large floorplates.
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They could have built a short (500-600 foot), fat box here. When the office market was booming and $125/sf rents were common, Macklowe switched the project from residential/hotel to office. I saw the proposed glass box, and it sucked. Fortunately, the economy collapsed, and the best use for the site now is a tall thin hotel/condo, as was planned originally.
The square footage here would easily enable a 900+ foot tower. (Isn't the Four Seasons planned for downtown expected to be around 915 feet?) The uppermost apartments would rise at least 200 to 250 feet above the GM and Four Seasons, which are the only structures that would otherwise block the park views. In addition, the views of Midtown and lower Manhattan would be amazing. |
http://www.observer.com/2011/real-es...lideshow/title
Park Avenue at 56th Street http://www.observer.com/files/slides...1.rYy_Wk0t.jpg By Laura Kusisto February 15, 2011 Quote:
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http://www.nypost.com/p/news/busines...G05Og396hJSN/1
February 22, 2011 Steve Cuozzo REALTY CHECK That means Turnbull might soon be hemmed in by demolition on both sides, a classic card in a developer's hand to intimidate a holdout. Meanwhile, Jacob & Co., the high-end watchmaker at 48 E. 57th St., is also refusing to leave. Like Turnbull, Jacob owns its building and confirmed through a rep it's staying put. Even if Turnbull moves to 50 E. 57th St., keeping that building up along with Jacob's next door would leave CIM and Macklowe with much less sidewalk frontage than they hoped for -- 101 feet rather than 150 feet, according to a zoning lot declaration filed with the city. James Messerschmidt SQUEEZE PLAY: Turnbull & Asser (center right, without netting) is snared in a demolition squeeze, as CIM Group works on the Drake Hotel site on East 57th Street. Of course, if Turnbull -- in the middle of the new building's hoped-for 57th Street façade -- doesn't move, it's a bigger problem. But these things have a way of eventually getting worked out, don't they? * In welcome news for Brookfield's World Financial Center, Oppenheimer Funds has made a long-term commitment to remaining at 2 WFC, where it just signed a new, 235,000 square-foot lease directly with the landlord. The 15-year lease with Brookfield will begin when its sublease from Merrill Lynch expires in 2013. The deal typifies a trend of large tenants either renewing leases years before their expiration or, as in this case, converting a sublease to a more stable direct one equally early on -- reflecting the belief that rents are bound to rise in the years ahead. Oppenheimer Funds -- not to be confused with Oppenheimer & Co., which is based at 125 Broad St. and negotiating a possible move to 85 Broad St. -- was represented by a Cushman & Wakefield team of Stuart Romanoff, Amy Fox and Robert Constable. Brookfield was repped in-house by Jerry Larkin and Duncan McCuaig. Oppenheimer Funds had once been at the WFC, but moved temporarily to Midtown after 9/11 and returned a few years later. Romanoff said the decision to stay at 2 WFC was by no means preordained. "We did go through an exhaustive search," he said. "We looked at the market care fully and Oppen heimer Funds decided it en joyed its occu pancy at 2 WFC. "They like Brookfield and they're excited about planned improvements at the WFC." Neither Romanoff nor anyone else involved would discuss the rent or asking rent. Brokers not involved with the deal suggested that WFC asking rents have risen from the mid-$40s a few years ago into the $60s, but no one was willing to guess about the Oppenheimer deal. Whatever the price, the lease will further stabilize the WFC, which faces possible moves-out by Merrill Lynch and Nomura a few years from now. We recently reported that FINRA is negotiating to move into 204,000 square-feet at 1 WFC via a sublease from Dow Jones, part of News Corp., which also owns The Post. scuozzo@nypost.com Read more: http://www.nypost.com/p/news/busines...#ixzz1Eh86POTA |
^ More from that article...
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It would be nice if they keep the facades of the old buildings, like on 712 5th. I predict a roughly 900 foot condo-hotel.
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Heh, I wonder if T&A would tolerate having their building physically moved a couple lots over to make room for the development.
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we can hope |
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