* Deutsche Bank to sell New York skyscraper
* Price not disclosed
(Corrects price to $7 billion, not $7 million, paragraph 2)
(Recasts first sentence, adds details of building)
By Ilaina Jonas
NEW YORK, June 4 (Reuters) - Deutsche Bank AG (DBKGn.DE)
has agreed to sell a skyscraper that will bring an end to real
estate developer Harry Macklowe's disastrous bet on the New
York office market, a source familiar with the deal said on
Thursday.
Worldwide Plaza, the last of seven New York office
buildings that Macklowe bought for $7 billion from Equity
Office Properties Trust when the U.S. commercial real estate
market peaked in early 2007, is being sold to a group of
investors led by RCG Longview and George Comfort & Sons, the
source said.
Representatives from RCG Longview and George Comfort & Sons
could not immediately be reached for comment.
Macklowe's purchase of the seven buildings was done
concurrently with the Blackstone Group's $39 billion
acquisition of Equity Office Properties Trust. The sale of the
company by chairman and founder Sam Zell was seen as the height
of the U.S. commercial real estate market that has quickly
collapsed because of the lack of debt financing available for
new loans.
To finance his purchase, Macklowe obtained a $5.8 billion
bridge loan from Deutsche and a riskier recourse loan from
Fortress Investment Group LLC (FIG.N). But within a year, the
credit markets began to dry up and Macklowe could not secure
permanent financing to repay the bridge loans.
Almost a year from the date he purchased the buildings,
Macklowe defaulted on the loans and turned over the buildings,
which also included 850 Third Avenue, Park Avenue Tower and
1301 Avenue of the Americas, to Deutsche Bank.
The failed deal also forced Macklowe to sell the General
Motors Building, one of the most prized in the city, to repay
Fortress. Macklowe bought the GM building in 2004 for a
then-record $1.4 billion and sold it for $2.8 billion to Boston
Properties (BXP.N), whose chairman is publisher Mort
Zuckerman.
A price for the 50-story, 1.5 million square foot building
on Eighth Avenue and 49th Street was not disclosed. The
building, whose tenants include law firm Cravath, Swaine &
Moore, is about half empty.
When Macklowe purchased the building, the mortgage was more
than $800 million. But since then, experts have estimated that
values may have fallen by 30 percent. The lack of sales has
made valuing buildings a fuzzy art.
(Reporting by Ilaina Jonas; Editing by Andre Grenon and
Matthew Lewis)
