Content area
Full Text
Last week's announcement of a sales agreement for a 44-story office tower on New York City's Times Square solves a major problem for Citicorp, agent bank on the building's $280 million mortgage. It also signals better times for lenders to several empty buildings erected in the area in the late 1980s.
Bertelsmann AG, the German publishing and entertainment giant, agreed to acquire the building for $119 million, or less than 50 cents on the dollar, from a bankrupt partnership.
Citicorp was a key player because its approval was needed for any reduction of the mortgage, which had a remaining balance of $252 million.
In fact, Citicorp's involvement was so deep that a Bertelsmann press release erroneously identified the bank as the seller. Marketing Costs Saved
Bertelsmann will occupy about 600,000 of the 870,000 square feet of office space in the building, letting Citicorp and its syndicate of Japanese lenders off the hook for the $50 million it might have cost to market the project had they been forced to take title.
For other lenders, the deal reduced the amount of available office space on the West Side of Manhattan by 17% and is expected to spur other companies to lease the remaining five million...