* Macklowe wants SL Green to back off
* SL Green holds two loans on office building
By Ilaina Jonas
NEW YORK, March 1 New York office building
owner Harry Macklowe on Monday filed suit against affiliates of
SL Green Realty Corp (SLG.N), a real estate investment trust
Macklowe accuses of trying to foreclose on loans for a Madison
Avenue building under construction.
Macklowe says SL Green, through two specially created
companies, holds two loans on the 30-story office building
under construction at 510 Madison Ave at 53rd Street.
It is refusing to grant Macklowe a rightful loan extension
and instead plans to move to foreclose on the property to get
it for a fraction of its value, according to the lawsuit filed
in New York Supreme Court in Manhattan.
The 372,000-square-foot building was under construction and
carried loans of about $390 million, according to the lawsuit.
The $257.5 million senior loan, secured by the property,
was granted by Union Labor Life Insurance Co in 2008. A junior
loan of $61.5 million from German American Capital Corp was
secured by interest in the borrower, also in 2008.
Another loan was secured earlier for $69 million and was
also secured by interest in the borrower.
The loans were to come due on March 1, but because of a
fire last year, its construction was delayed. That gave
Macklowe the right to extend the loan, according to the
But in the meantime, SL Green bought two of the three loans
-- the senior mortgage, for $170 million, and the $61.5 million
loan junior to that one for less than $15 million, according to
SL Green will not honor the extension and has said the
property, based on an appraisal, is worth only $180 million,
Macklowe says in the lawsuit. Instead, it said last month it
would demand full repayment of the loans on March 1.
A spokesman for SL Green could not be reached immediately
Macklowe wants the court to order SL Green to grant the
extensions and to bar it from foreclosing.
(Reporting by Ilaina Jonas; Editing by Gary Hill)