Residential Market Turmoil Forces Harry Macklowe to Sell GM Building
- May 27, 2008
New York–Subprime loan market issues caused famed commercial real estate developer Harry Macklowe to sell the iconic General Motors Building for $3.95 billion to Boston Properties, Forbes said Tuesday.Real estate management company Boston Properties will pay $1.5 billion in cash, $10 million units in limited partnership interest and assume $2.5 billion in debt to own a 49 percent share of the General Motors Building. Additional unnamed investors will hold the rest of the ownership. A year ago, Macklowe received $5.8 billion in financing from Deutsche Bank and $1.2 billion from Fortress Investment Group to buy seven Manhattan properties; but as he prepared to refinance his short-term loans, the subprime mortgage market fallout caused investment banks and lenders to restrict borrowing.In February, Macklowe had to default on loans to Deutsche Bank and Fortress. Shortly after, he hired C.B. Richard Ellis Group to help sell the GM building, Forbes said.