RELATED COS, the New York developer founded by Stephen Ross, took title to 232 unsold condominium units in Manhattan’s Battery Park City for $82.8 million after buying a foreclosure bid from lender Anglo Irish Bank.
The deal for 225 Rector Place closed yesterday, according to a statement from Justin Metz, managing principal of Related.
“It was an ideal fit for our expertise in, and focus on, execution projects,” Mr Metz said in the statement. “We look forward to bringing new resources to the development and maximising value for both our partners and the existing owners.”
The sale marks a full circle for the building’s ownership. Related developed the property close to the site of the World Trade Center for apartment rentals in 1986 and sold it in 2005 to developer Yair Levy, who converted it into a 304-unit condominium.
Mr Levy sold fewer than 25 per cent of the apartments. Mr Levy’s lender, Anglo Irish, began foreclosure proceedings in 2009, saying in court papers that the developer did not pay property taxes or contractors and failed to “complete the work needed to make the project safe and habitable”.
The bank claimed that the company defaulted on loan repayments and breached a number of other terms of its agreement with the lender.
The Battery Park investment, close to the site of the World Trade Center in Manhattan, was one of Anglo’s most troubled projects in a market where it had expanded rapidly under the oversight of David Drumm, who set up the bank’s US operations in 1999.
While Anglo’s overall loanbook increased more than fivefold from €13.3 billion in 2002 to €73.8 billion in 2007, its US loans surged elevenfold over the same period, from €836 million to €9.3 billion.
However, even by September 2005, Anglo’s US loan book was still just €2.5 billion. Loans of about €7 billion were provided over just 24 months, or roughly €60 million a week – all underwritten and approved by a team of just 100 people
Mr Levy is a high-profile figure in New York. He emigrated to the city from Israel in the early 1970s and moved into property developing after a successful stint in fashion retailing.
He has regularly done deals in partnership with another well-known property developer in the city, Kent Swig, although the pair reportedly had a falling out late last year.
The bank, nationalised in 2009 after its property loans soured, was owed $135 million on the project.
Representatives from Related attended the November foreclosure auction but did not bid.
Anglo Irish won with an $82.8 million “credit bid”, an offer without having to commit any money. – (Bloomberg)
