NEW YORK | 3 Columbus Circle | FT | FLOORS

[NYguy]

http://online.wsj.com/article/SB1000...googlenews_wsj

SL Green Forming Venture To Save NYC Office Tower

By LINGLING WEI
October 25, 2010

Developer Joe Moinian is bringing in SL Green Realty Corp. in a bid to save one of his crown-jewel property holdings from being foreclosed by a venture led by Related Cos, according to people familiar with the matter.

The 26-story office tower at 1775 Broadway, which has been renamed 3 Columbus Circle, has been at the center of a fight between Mr. Moinian and the Related venture, led by real-estate mogul Stephen Ross, and Deutsche Bank AG since the venture bought the $250 million mortgage on the property a couple of months ago and sought to foreclose.

Mr. Moinian has been trying to fend off the foreclosure attempt by paying off the mortgage, the people said. SL Green, a publicly traded real-estate investment trust that is New York's largest landlord, is expected to contribute capital for the joint venture with Mr. Moinian, according to the people.

The move is the latest example of increasing investor interest in commercial real estate in prime markets like Manhattan.

Mr. Moinian has been struggling to save 3 Columbus Circle, a 700,000-square-foot building he acquired in 2004 in a deal that valued the property at about $250 million. He spent about $100 million upgrading it. The tower is only 16% occupied, according to real-estate-services firm CoStar Group Inc. A spokeswoman for Mr. Moinian said in a written statement in August that his company, the Moinian Group, "is now actively marketing" the building and "closings \[are\] expected soon on major office and retail tenants."

But the struggles made 3 Columbus Circle a target for the opportunistic investors who have been circling commercial real estate, particularly in Manhattan and other prime markets. A common strategy of these investors has been to buy the debt on troubled buildings at a discount and then try to foreclose.

What's unusual about 3 Columbus Circle 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.

Related has been talking to department store Nordstrom about its intent to foreclose on 3 Columbus Circle then demolish it and build a new tower in its place, people with knowledge of the situation said. Related, which developed the $1.7 billion Time Warner Center a block away on Columbus Circle, is thinking about putting apartments on top of the store and will seek architects to design the building in coming weeks, these people said.

[jackie60]

I was walking around the building this afternoon and I have to say they really ruined it with the re-clad.
It's the perfect location for a major project, a small city block. The building should really sing.

[RobertWalpole]

This really sucks.

[Innsertnamehere]

Originally Posted by RobertWalpole

This really sucks.

why?

they said that they are still probably going to build....

[SkyscrapersOfNewYork]

Originally Posted by Innsertnamehere

why?

they said that they are still probably going to build....

no they want to save the existing structure by getting a loan to pay off the mortgage...

[RobertWalpole]

Hopefully, Moinian and SL will fail. Quite possibly, they're also angling for an equity share in Related's proposed tower. Moinian and SL know that a very high-end residential tower in that location is worth more than a Class-C, white elephant office building.

[Busy Bee]

^That's giving them a bit too much credit. If they KNEW that why would they have ever proceeded with such an ill-conceived reclad/reno project to begin with - instead capitalizing on the parcel's potential and developing a show stopper tower? I'm firmly in the camp of thought that thinks these clowns were incompetent from day one.

[RobertWalpole]

I knew someone would ask that question.

At the time that Moinian conceived this project, the office market was red hot and many piles of junk were renting for $100 sf. Moinian clearly thought that he could work magic like that.

While there is a fairly strong demand for office space in NY at the moment, it's for brand new, Class-A space -- not a piece of garbage with a new glass facade tacked on. This space would sit empty for several years as offices. Mega-luxury apartments in that location would sell briskly, however.

[NYguy]

http://online.wsj.com/article/SB1000...googlenews_wsj

Deal May Pluck Tower From Related's Grasp .

Mr. Moinian should now be able to hold on by partnering with SL Green. Under an agreement announced late Monday, SL Green will make funds available to pay off the mortgage and complete the $175 million redevelopment and lease-up of the property.

Mr. Moinian's company, the Moinian Group, will continue to lead the efforts to turn the 770,000-square-foot tower, built in 1927, into a top-tier property.

The restructuring of the property means that it will likely continue as mostly an office building. Mr. Ross was talking to department store Nordstrom about a plan to demolish 3 Columbus Circle and build a new mixed use tower in its place, people with knowledge of the situation said. Nordstrom would have located its first Manhattan store in the base and apartments would have been above it.

http://www.nypost.com/p/news/busines...jrkRd460IqT9UI

Moinian inks deal with SL Green

By LOIS WEISS

Related Cos., which developed the nearby Time Warner Center, had hoped to demolish the older structure at 58th Street and create a modern tower.

Nordstrom had agreed to go into the base of the building, which would have been topped by luxury residential condominiums overlooking the shorter American Museum of Folk Art and Central Park.

http://www.bloomberg.com/news/2010-1...rom-rival.html

SL Green Helps Moinian Bid to Keep New York City Tower From Rival Related

By David M. Levitt

Moinian paid $250 million for the tower in 2004 and started a renovation of the mostly empty building, only to have the credit crisis thwart his ability to recoup his investment. He stopped payments on his $250 million mortgage in January, according to the foreclosure lawsuit filed by a Deutsche Bank unit last month.

The property is 23 percent occupied, and cash flows are insufficient to cover the debt, according to servicer notes compiled by Bloomberg. It’s the former home to Newsweek magazine, which moved out last year.

Ross wants to tear down the building and replace it with a residential tower with retail at ground level, possibly with the city’s first full-sized Nordstrom department store, a person with knowledge of his plans said. The person asked not to be identified because the negotiations are private.

[Busy Bee]

What a let down.

[Infernal_Elf]

probably better this way

really stupid to demolish a building that has just been refubished. it would just be a total waste of money and materials.

they should hawe tought themselves about and destroyed it right away instead.

[Dac150]

It really never made sense to me to take this one down after all those renovations only to put something right back up, regardless of the height. It's the name of the game in this city, but in this case......

[Alliance]

I don't understand how the preservation of a newly refurbished building is a "let down."

[Busy Bee]

^Seriously? Have you been following this thread?

I don't have inside knowledge but I would speculate the interior work is far from completed. So the facts are they took a solid masonry structure that was just a little worse for wear and defaced it with smoke and mirrors trickery in the form of an uninspired curtain wall, ran out of money after nobody fell for the building being class A just because of those 'improvements' resulting in 0% leased. Moinian has to find somebody to bail their incompetent greedy philistine asses out, and in the mix a third party comes up with the idea of putting the whole thing out of its misery and probable failure and instead building a supertall with a top notch department store at its' base - all discussed ona site called SkyscraperPage.

And you don't understand how the "preservation of a newly refurbished building is a let down?"

[Dac150]

I agree that this building never should’ve gone through that facelift in the first place; they could’ve easily done interior renovations and touched up the exterior. The glassy finish is not only cheaply done, but is completely unnecessary and fails to fulfill what it attempted to. The good news with that is that at any time the façade can be removed with the original still underneath.

[NYguy]

Originally Posted by Dac150

The glassy finish is not only cheaply done, but is completely unnecessary and fails to fulfill what it attempted to. The good news with that is that at any time the façade can be removed with the original still underneath.

Only timing hurt this one. The space will be absorbed eventually.

[NYguy]

http://www.nytimes.com/2010/10/27/ny...1&ref=nyregion

Developers Wage Battle Over a Tower Deemed Ugly

By CHARLES V. BAGLI
October 26, 2010

From his office at Time Warner Center, the developer Stephen M. Ross looked directly across Columbus Circle to a nearly vacant, financially troubled and, in his view, ugly, 26-story building.

This being New York, where real estate is often a blood sport, he decided to do something about it. His firm, Related Companies, bought the $250 million mortgage on the property in September, intending to foreclose on the owner, demolish the building and erect a sleek skyscraper slightly taller than his 750-foot, two-towered Time Warner Center.

But on Tuesday, the owner of the building that offended Mr. Ross, the rival developer Joseph Moinian, fought back, filing a 33-page lawsuit in State Supreme Court in Manhattan accusing his lender and Mr. Ross of a “long-lived predatory lending scheme” designed to steal the building, known as 3 Columbus Circle, for a fraction of what it was worth. He wants $200 million in damages.

Related Companies said the suit was “totally without merit.” But Mr. Moinian also enlisted a big-time partner, SL Green Realty, a publicly traded real estate company that owns 30 office towers in New York City, in his struggle to hang on to 3 Columbus Circle and complete a $175 million renovation.

SL Green is not party to the lawsuit, but its willingness to enter the fray and invest in Mr. Moinian’s project makes it possible for Mr. Moinian to pay off his old mortgage, which is in default. But that is by no means a certainty.

“Related tried to steal this building,” said Mr. Moinian’s lawyer, Stephen B. Meister. “They’re not going to succeed.”

Mr. Meister says Mr. Moinian will pay the mortgage. The question is how much he will have to pay. Mr. Ross contends that the mortgage has swelled to $310 million with interest and penalties.

Mr. Meister counters that Related’s number includes a “bogus” $54 million prepayment penalty, which Mr. Moinian refuses to pay. Mr. Moinian does have assurances from SL Green that it will provide a new $250 million mortgage and have an equity stake in the property, if and when the Related mortgage is paid off.

Related said the lawsuit was “designed to attempt to excuse the borrower’s default in its mortgage obligations.” Mark Walfish, a lawyer for Related, said the company hoped Mr. Moinian and his partners would fulfill their obligations and “pay the approximately $310 million owed on the loan.”

Like many developers during the real estate boom, Mr. Moinian went on a shopping spree, accumulating 20 million square feet of property in Manhattan and elsewhere. When property values and rents plunged after 2007, Mr. Moinian ran into trouble with his lenders. He has restructured hundreds of millions of dollars in loans on three properties downtown, but he is behind on payments for three other buildings, including the W New York Hotel.

He bought 3 Columbus Circle, also known as 1775 Broadway, in 2004 and refinanced the property two years later, borrowing $250 million from Wachovia. Mr. Moinian wanted to convert the building to a first-class office tower, even as other developers were canceling plans for office towers on nearby sites.

He defaulted on that mortgage in January. Nine months later, Related bought the note and moved to foreclose, and Mr. Ross announced on CNBC that “there is a higher and better use for that property.” He added, “We are hoping to do something there.”

Although Mr. Moinian had spent $100 million renovating the building, including its new glassy exterior, Mr. Ross wanted to tear it down. He planned to put a Nordstrom department store in the base of a new skyscraper designed by a famous architect, with about 140 condominiums on the upper floors.

In the suit, Mr. Moinian claims that his lender and Mr. Ross scuttled leases with two potential tenants by insisting on a demolition clause, requiring the companies to vacate. He plans to ask a judge to let him pay off the mortgage while he and Related battle in court over damages and whether Mr. Moinian will be required to pay the $54 million penalty.

________________________


http://www.nypost.com/p/news/busines...Ezi8pDG5QEmwAI
Site squeeze a real Circle jerk

By LOIS WEISS
October 27, 2010

New York developer Joseph Moinian is suing Related Cos. and a group of lenders, accusing them of a "loan to own" scheme as he fights against a takeover of his newly renovated 3 Columbus Circle tower.

The suit, filed late Monday in Manhattan state court by lawyer Stephen B. Meister, accuses Related and the lenders of interfering with Moinian's business dealings at the Midtown office building, also known as 1775 Broadway, thereby making it "un-leasable."

Stephen Ross' Related, which owns the nearby Time Warner Center, bought the debt on the 26-story tower along with a unit of Deutsche Bank AG.

They sued last month to foreclose on the building, as Moinian missed payments last year.

Moinian has since made certain payments while he renegotiated the mortgage with special servicer CWCapital, also named in the lawsuit.

The suit seeks $600 million in damages and a stay of the foreclosure action.

Moinian also wants to be able to pay off the mortgage and have it transferred.

In addition, he is asking that defendants be barred from making "false and misleading" statements about the property.

Yesterday, Moinian and SL Green Realty Corp. announced the framework of an agreement to recapitalize the tower, a deal first reported in The Post.

The pact calls for Moinian to oversee the continued $100 million redevelopment and management of the 770,000-square-foot tower, with SL Green handling leasing.

SL Green will have a 49 percent stake and has agreed to provide backup financing.

However, for the SL Green venture to succeed, Moinian needs an injunction against the foreclosure action filed by Related's partner, German American Capital Corp., a division of Deutsche Bank.

The suit also names original lender, Wachovia; loan trustee, Bank of America; special servicer, CWCapital Asset Management; and Related, which bought the mortgage and then reassigned it to GACC.

Moinian paid $130 million for the tower in 2000 and began renovations shortly before the credit crisis hit.

He stopped making payments in 2009 but the suit claims that starting in January, he negotiated a complete restructuring of the mortgage and made over $22 million in "good faith" payments -- signing the agreement in June.

According to the suit, the lenders then received an offer from Related for the loan and "changed course."

They refused to countersign the agreement, and demanded six-month demolition clauses with no tenant reimbursement for a 33,000 square-foot lease with HQ Global Workplaces and a 77,000-square-foot deal with talent agency William Morris, thereby killing the deals. The building is 80 percent vacant.

The lenders also demanded full payment in March but then refused to accept a payoff or reassign the $250 million mortgage without a $54 million pre-payment charge that was so "bogus" it was not even requested in the foreclosure action that was filed in September, right after Related bought the loan, the suit claims.

Related's Ross has made no secret of his plans to take over the tower, demolish it and build an entirely new and larger tower with Nordstrom's in the base topped by luxury condos overlooking the American Folk Art Museum, Central Park and, of course, his Time Warner Center.

In a statement, Mark Walfish, counsel for Related Companies, said: "Our client believes that the lawsuit is totally without merit and is designed to attempt to excuse the borrower's default in its mortgage obligations.

[pico44]

Originally Posted by Busy Bee

^Seriously? Have you been following this thread?

I don't have inside knowledge but I would speculate the interior work is far from completed. So the facts are they took a solid masonry structure that was just a little worse for wear and defaced it with smoke and mirrors trickery in the form of an uninspired curtain wall, ran out of money after nobody fell for the building being class A just because of those 'improvements' resulting in 0% leased. Moinian has to find somebody to bail their incompetent greedy philistine asses out, and in the mix a third party comes up with the idea of putting the whole thing out of its misery and probable failure and instead building a supertall with a top notch department store at its' base - all discussed ona site called SkyscraperPage.

And you don't understand how the "preservation of a newly refurbished building is a let down?"

So you haven't figured out Aliance's M.O?

[NYC4Life]

Why not tear down the glass facade, refurbish the building to its original appearance and build a taller tower on top, just like what was done with the Hearst Tower.

[NYguy]

Originally Posted by NYC4Life

Why not tear down the glass facade, refurbish the building to its original appearance and build a taller tower on top, just like what was done with the Hearst Tower.

You would need additional air rights to do that.