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January 13, 2011 1:15 PM Related Cos. to pay $82.8M for Rector Sq. project Gets the troubled residential tower’s 232 unsold units, plus garage and office space, from Anglo Irish Bank at bargain price; ongoing fallout from failed condo conversion.
BatteryParkCityApartments Buck Ennis [+] Enlarge Battery Park City mixes apartment buildings, office towers and green space. Also See * Most residential landlords drop concessions * Surprising rebound in Manhattan apt. market Filed Under : Battery Park City, Construction & Property, Related Cos., Residential Real Estate, Yair Levy, YL Real Estate Where : New York, New York City, Manhattan, Downtown, Battery Park City In one week, Related Cos. is expected to take over the unsold units at Rector Square, beleaguered developer Yair Levy’s failed Battery Park City condo conversion, according to sources. The developer will take over the residential tower’s 232 unsold units, parking garage and commercial space directly from Anglo Irish Bank, the project’s largest lender, for the bargain price of $82.8 million. That is the same price that the bank paid to take the property back at a foreclosure auction in November. Anglo, which was the only bidder at the auction, was owed roughly $135 million on the project, which is located at 225 Rector Pl. The law firm of Herrick Feinstein, which represents Anglo Irish, declined to comment. A Related spokeswoman also declined to comment. Related has already contacted the New York state attorney general’s office and expressed its intention to become the new sponsor of the development, sources said. The developer will formally apply to become Rector’ Square’s sponsor once the deal is closed. The attorney general’s office declined to comment. Related’s move was anticipated, since many had expected it to bid for the 304-unit property at the auction two months ago, but the developer did not step up. The company has been involved with the project since early last year when, during the foreclosure proceedings, it was appointed by Rector Square’s receiver to manage the property. In 2009, Mr. Levy’s development firm, YL Real Estate Developers, defaulted on its $165 million mortgage on Rector Square. In its defense, YL Real Estate claimed that Anglo Irish did not comply with its loan obligations, which stalled the condo-conversion project. So far, only 72 units at the building have been sold. Meanwhile, 45 tenants at Rector Square are suing Mr. Levy and other parties involved in the botched condo conversion project for $100 million. Those tenants are anxiously awaiting the results of the auction. The decision on that lawsuit is still pending. When the deal closes, Related will have to decide whether to continue the conversion or maintain the unsold units as a rental property. Filed Under : Battery Park City, Construction & Property, Related Cos., Residential Real Estate, Yair Levy, YL Real Estate Where : New York, New York City, Manhattan, Downtown, Battery Park City
