IT’S back to the drawing board for the sale of Worldwide Plaza.
Insiders said it looks like high-level suits in Germany have nixed Deutsche Bank’s plan to provide financing and to retain a stake in the office tower in order to see some upside along with George Comfort & Sons and RCG Longview, which earlier this month entered into a contract to buy the building at Eighth Avenue and West 50th Street.
Yesterday morning, a letter went out to the real estate community from marketers at Eastdil Secured explaining the Comfort-RCG contract was terminated “through no fault of the purchaser,” and that new bids would be due July 15.
According to people familiar with the matter, the deal on the table, which had pricing in the range of mid-$300s a square foot, didn’t sit well with DB’s management.
And several real-estate sources speculated that a rival bidder might have whispered in the ears of bank bosses suggesting they could complete a deal without the bank having to cough up any financing.
Under the terms of the George Comfort-RCG deal, the buyers were expected to contribute as much as $185 million in equity, while Deutsche Bank would supply a $450 million mortgage. The 1.7 million square foot, 50-story tower is the last of the portfolio of towers purchased by Macklowe Properties from Equity Office Properties during the peak of the market in 2007.
The tower, which faces the prospect of being half empty when advertising firm Ogilvy & Mather moves out in the coming months, is being sold by Deutsche Bank after the bank took possession of the building from Macklowe, who has lost all seven of the New York City towers it bought from EOP for $7.1 billion.
What the killing off of the deal will mean for George Comfort and its President, Peter Duncan, remains an open question, though sources said Duncan is mulling legal action over his now worthless signed contract.
Duncan did not return a call for comment.
Among the outfits seen making a bid for the tower in re-opened auction is San Francisco-based real-estate firm Shorenstein and Germany-based firm Paramount, each of which prevailed in sales of other Macklowe towers. World Trade Center developer Larry Silverstein may also take a run at the building, sources said.
Shorenstein declined to comment, while Paramount did not return a call.
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Douglas Durst is stepping down as co-president of the 95-year-old Durst Organization, but will remain chairman.
His cousin Jody Durst, the other co-president, will be sole president.
“They were surprised,” Douglas Durst told us of his announcement to the family last week. “We have to figure out how we are going to transition the family business and this is a start.”
He expects to have less involvement on a daily basis by giving up things like “meetings.”
“I will still be at the office most days but not so involved in the day-to-day operations,” he said, adding, “It’s interesting but it’s exhausting.”
Among the exhausting projects facing the company is a proposal to develop Pier 57, where it’s competing with rivals Youngwoo & Associates and the Related Cos.
“They [city officials] notified the three bidders and want us to mark up the MOU [memo of understanding], and they want to make a decision in July,” Durst said.
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To “rationalize” its client Border’s stores, DJM Realty has quietly hired Robin Abrams and Howard Dolch of The Lansco Corp. to pitch the Kips Bay Border’s store on Second Avenue.
Lansco also has taken over the marketing of the Park Avenue at East 57th Street location.
The 20,322-foot 576 Second Ave. Borders lease, which includes 13,345 feet on the ground and 6,977 feet on the mezzanine, has an asking rent of $1.5 million a year and goes through June of 2019.
The mini-strip mall near NYU Medical Center also has a movie theater, Petco, Rite Aide, Crunch gym and an Office Depot that is also available.
Meanwhile, the 42,361 foot, four-level store on Park Avenue is leased through January 2018. The space is part of a condo now owned by Shorenstein that is being sold to an entity controlled by Heritage Realty.
The upstairs Ritz co-op had a right of first refusal and, as Post colleague Steve Cuozzo reported earlier, is now being sold to Ritz resident and real estate investor Charles Cohen, who told us the deal had not yet closed.
Abrams is marketing that Borders for $3.5 million a year in rent, a $1 million price slash from another broker’s efforts.
“There are a lot of discount apparel retailers look ing in the market,” Ab rams noted.
Restaurants, home stores and small department stores are also under consideration.
Since the city’s marketplace is generally now all about six degrees of separation from Harry Macklowe and his company, here’s another one: Shorenstein paid Macklowe Properties’ $23.1 million in June 2004, based on the cash flow generated by the Borders deal that was cut in February of 1997 by Harry’s son Billy. Cohen is paying slightly less. [email protected]
