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REFILE-D. Bank moves to foreclose on Macklowe loan -WSJ

Thu Sep 4, 2008 1:35am EDT

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(Restores dropped word 'Journal' in first paragraph)

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Sept 4 (Reuters) - A group of lenders led by Deutsche Bank AG (DBKGn.DE) has sued Macklowe Properties Inc to foreclose on a $510 million loan the developer took out to build on the former site of the Drake Hotel in New York, the Wall Street Journal said, citing court papers.

Macklowe Properties bought the Drake Hotel in 2006 for $418 million and had demolished it, seeking to build a major office tower atop a base of high-end stores.

The former Drake Hotel property is on Park Avenue between 56th Street and 57th Street.

Deutsche Bank syndicated the loan on the Drake property to a group of creditors, keeping about $30 million to $40 million for itself, the paper said, citing a person familiar with the matter.

Macklowe was not immediately available for comments.

Earlier this year, Macklowe was forced to give back seven New York buildings to a group of lenders lead by Deutsche Bank after it was unable to refinance $5.8 billion of loans.

The company, founded by Harry Macklowe, was also forced to sell the prized General Motors Building on Fifth Avenue in New York for $2.8 billion to repay another loan. (Reporting by Saumyadeb Chakrabarty in Bangalore; Editing by Quentin Bryar)

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