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Boston Properties, Goldman Sachs Acquire GM Building; Macklowe Son To Take Over

Posted By squarefeet On May 28, 2008 @ 8:40 am In Commercial Finance and Lending,Commercial Real Estate Investing,Notable Deals | 1 Comment

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Over the weekend, the fate of the¬†GM Building at 767 Fifth Avenue became known. Boston Properties and Goldman Sachs led an investment group that acquired the trophy asset along with other buildings from Macklowe Properties for $4B, $2.5B of which was assumption of debt. It’s rumored that middle eastern investors and sovereign investment funds are part of the investment group.

This deal highlights a tough 15 month period for the Macklowes which saw them make a spectacularly large acquisition of 7 buildings from Blackstone, only to default on the loans associated with the acquisition and finally the disposition of a dozen buildings totalling nearly 10 million square feet to escape financial ruin.

The elder Macklowe, 70, took on a $1.2B bridge loan from Fortress Investment Group which was recourse (meaning that the Lender, Fortress, could come after the personal assets of Macklowe). Part of the group’s personal assets (assets outside the investment vehicle created for the acquisition) was the GM Building which is likely now the most expensive office building ever sold.

It seems that the younger Macklowe is taking over the family empire from his father, who twice, has risked much at the wrong time and cost the family dearly, losing significantly both in the early 90′s and now. Of course, it must be said that the elder Macklowe has made many right moves as well, including the acquisition of the GM Building in 2003 for $1.4B, which has subsequently doubled in value.

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1 Comment To "Boston Properties, Goldman Sachs Acquire GM Building; Macklowe Son To Take Over"

#1 Pingback By YoY US and International Investment Sales Down Dramatically in Q1 | Square Feet Commercial Real Estate Blog On June 12, 2008 @ 6:09 pm


[...] on price. That might change though over the course of the next one to two years as loans mature. As Macklowe Properties found out, refinancing a short term loan in this market is difficult to do. If owners don’t can’t [...]


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[2] Macklowe Likely To Forfeit His 7-Property New York City Portfolio: http://www.squarefeetblog.com/commercial-real-estate-blog/2008/02/06/macklowe-likely-to-forfeit-his-7-property-new-york-city-portfolio/

[3] Details of Macklowe’s EOP NYC Portfolio Acquisition Shed Light on Underwriting Standards: http://www.squarefeetblog.com/commercial-real-estate-blog/2007/09/25/details-of-macklowes-eop-nyc-portfolio-acquisition-shed-light-on-underwriting-standards/

[4] Sale of Macklowe’s GM Building Looking Likely: http://www.squarefeetblog.com/commercial-real-estate-blog/2008/05/20/sale-of-macklowes-gm-building-looking-likely/

[5] Broadway Partners Runs Into Trouble – San Francisco Holdings On The Table?: http://www.squarefeetblog.com/commercial-real-estate-blog/2008/10/11/broadway-partners-runs-into-trouble-san-francisco-holdings-on-the-table/

[6] Macklowe Losing Another Building: http://www.squarefeetblog.com/commercial-real-estate-blog/2009/04/21/macklowe-losing-another-building/