The General Motors Building Is Still Up for GrabsWhich city billionaire will get his chubby white hands on the General Motors building? The Observer the other day suggested Daily News owner Mort Zuckerman was in the running to acquire the iconic midtown building, but his people told the Sun today that it wasn’t so. (Could he be feeling so diminished by Rupert that he spread the rumor to make himself look cool? Just asking!) Quoting “sources with knowledge of the proposals,” the Sun says ground-zero developer Larry Silverstein has made an offer, possibly in partnership with the California State Teachers’ Retirement System, of more than $3 billion. That would not only be a record-breaking price for a building in Manhattan, but it would go a long way toward easing current GM-building owner Harry Macklowe’s credit woes — he currently owes various lenders around $7 billion. And you thought your credit-card bills were high.
Silverstein Bids Above 3 Billion for GM Building [NYS]
Related: Harry Macklowe Takes It on the Chin
Rudy Takes a BreatherLAW
• Now that he’s dropped out of the White House race, Rudy Giuliani plans to decompress before he starts lawyering at Bracewell & Giuliani. [Texas Lawyer]
• Oh, snap! Skadden is so not pleased about the hottest-female-associate contest that took place on the Skadden Insider blog. [Law.com]
• Perhaps Covington & Burling should have consulted its client Major League Baseball before agreeing to represent pitcher Roger Clemens. [American Lawyer]
white men with money
Harry Macklowe Takes It on the Chin Just about a year ago, real-estate mogul Harry Macklowe borrowed $5.8 billion from Deutsche Bank to buy seven office buildings in New York City while putting up just $50 million of his own cash. That debt would have come due today, but last week Macklowe made a tentative agreement to turn control of the buildings back over to the bank, since the current credit crunch has made it impossible for him to refinance the debt. Though some holders of the debt are reluctant to sign on to the plan, according to The Wall Street Journal, the deal will probably go through by the end of the day. Meanwhile, Macklowe is pleading with another lender whose bill came due today — Fortress Investment Group, from whom he borrowed $1.4 billion in 2003 — to give him additional time. To pay them off, he’ll have to sell off two other buildings he owns: a small midtown office building and the celebrated General Motors Building, bringing the total number of buildings he lost to nine.
If the deal with Deutsche Bank goes through, could this be the first multi-billion-dollar real-estate deal gone sour in which unsuspecting investors aren’t given the shaft — in the form of multi-billion-dollar write-downs or plummeting stock prices — and the responsible parties are the only ones to take it on the chin?
it just happened
Harry Macklowe Doesn’t Own Those Seven Buildings Anymore
Harry Macklowe got a little carried away last year: He bought seven midtown office buildings, including the General Motors Building, in ten days. He spent over $7 billion on the deal — but only $50 million of that was his own money. So lately, Harry has been in a pickle: Next week, his loans are coming due, and seeing as we’re smack in the middle of a worldwide credit crunch, there’s no way for him to refinance. Which is why this week, The Wall Street Journal has just reported, Harry has made a tentative agreement with his lender, Deutsche Bank, to turn the buildings over to them. No more buildings for Harry. Well, not exactly. Even though Deutsche Bank would control the properties, “Macklowe would still retain the titles, to avoid triggering costly New York City transfer taxes, and Macklowe Properties would still manage the buildings.” So basically, dude just went from being a mogul to being a super.
Macklowe in Deal to Cede Control Of Seven Manhattan Properties [WSJ]
At Least Sam Zell Is Pragmatic About the Fact That Most Journalists Are Functional AlcoholicsMEDIA
• Sam Zell, the real-estate tycoon turned media mogul, took his brusque, fake-folksy style to his minions at the Tribune with a new employee manual. A few samples: “7.1. If you use or abuse alcohol or drugs and fail to perform the duties required by your job acceptably, you are likely to be terminated. … Coming to work drunk is bad judgment. 7.2. If you do not use or abuse alcohol or drugs and fail to perform the duties required by your job acceptably, you are likely to be terminated.” Also, “You may want to think twice before you enter into an intimate relationship with a co-worker. When you start, it might seem like a good idea. It’s when you stop, or the wrong people find out (and they will) that you could discover that perhaps it wasn’t.” [WP, Tribune]
• Judith Regan on Giuliani: “Is he getting uglier? Is his face looking more twisted? What happened to him?” Don’t feel too bad, Rudy. You know what they say: When someone teases you like this, it means she likes you. [Mixed Media/Portfolio]
• Facebook threatened to revoke Nick Denton’s account after the blog-lord posted pics of Steve Brill’s recent-college-grad daughter Emily. [Gawker, Daily Brief/Portfolio]
Whose Interviews These AreThe New Yorker confuses Robert Frost and David Frost (whoops!), much to the amusement of both “Page Six” and the Gatecrasher. Porn star Jenna Jameson has lost a lot of weight and has started acting unprofessionally since her divorce. Real-estate developer Harry Macklowe gets preferential treatment at all Icon parking garages in Manhattan. Ben Widdicombe got an earful from Pauly Shore. The Russian Tea Room uses out-of-context quotes to give the impression that it has been well reviewed. Tom Wolfe will give a speech in Miami about art and architecture. A number of J.P. Morgan bankers are expected to attend Dana Vachon’s book party tomorrow night, despite the treatment the firm (or, rather, the fictitious firm based on Morgan) gets in the book.