UPDATE 3-Macklowe reaches extension agreements with lenders

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By Ilaina Jonas

NEW YORK, Feb 15 (Reuters) - Harry Macklowe has reached extension agreements with his lenders for about $7 billion in loans his real estate firm used to buy seven Manhattan buildings, a Macklowe representative said on Friday.

"Macklowe Properties has reached extension agreements with Fortress Investment Group LLC (FIG.N: Quote, Profile, Research, Stock Buzz) and Deutsche Bank AG (DBKGn.DE: Quote, Profile, Research, Stock Buzz)," Macklowe representative Howard Rubenstein said in a statement. "No further comment is available."

Last year, Macklowe borrowed $5.8 billion in debt from a group led by Deutsche Bank and also secured a $1.2 billion equity loan from Fortress to buy the office buildings that were part of the Manhattan portfolio owned by Equity Office Properties Trust. Macklowe's deal was in connection with Blackstone Group LP's (BX.N: Quote, Profile, Research, Stock Buzz) acquisition of Equity Office.

The equity loan is secured by a 49 percent interest in other Macklowe properties -- including the trophy General Motors Building on Fifth Avenue and 59th Street. Deutsche bought 25 percent of the equity from Fortress.

It was not clear if the agreements for an extension encompassed both the equity and debt loans and all the lenders. The loans were short-term because Macklowe intended to replace them with longer-term financing. But the credit crisis left him unable to secure new debt.

If the agreement includes both loans, the commercial real estate market may breathe a collective sigh of relief as a foreclosure would have been messy and would have made other lenders hesitant.

"Nobody wants to pick up the newspaper and start reading about commercial foreclosures the way they're reading about residential foreclosures," said Howard Michaels, chairman and CEO of The Carlton Group, a real estate investment banking firm.