By Ilaina Jonas
NEW YORK Feb 12 Lehman Brothers Holdings Inc
has agreed to sell 237 Park Avenue, a 21-story Midtown Manhattan
office building, to RXR Realty and Walton Street Capital LLC,
the winning bidders said on Tuesday.
The purchase price is $820 million, two sources familiar
with deal said.
The pending sale comes just months after Lehman agreed to
sell its biggest property holding, apartment owner Archstone, to
AvalonBay Communities Inc and Equity Residential
for $6.5 billion plus the assumption of debt.
Lehman, which collapsed in 2008, emerged from bankruptcy in
March 2012 and is selling assets to repay creditors.
Lehman originally was the lender to Broadway Partners, which
used the $1.23 billion loan in 2007 to buy the building as part
of a larger purchase of a portfolio of properties.
When Broadway defaulted on part of the mortgage, Lehman was
allowed by the bankruptcy court in 2010 to buy a junior part of
the mortgage for up to $255.4 million. Lehman paid roughly 85
percent of the face value of that and took control of the
All told, after repaying the senior mortgage and factoring
the price paid for the junior slice, Lehman stands to net about
$185 million. Lehman has also been recouping the payments on the
The 1.25-million square foot building is on Park Avenue
between 45th and 46th streets, close to Grand Central Terminal,
and is 80 percent occupied, RXR and Walton Street said in a
RXR, one of the biggest owners of New York City property and
Walton Street, a private real estate investment company, plan to
renovate the building. The plans include new entrances, a
redesigned atrium and new elevator cabs. They also plan to
install a new glass facade enclosure on the two top floors,
allowing for floor-to-ceiling windows.