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Early this year, the outlook appeared grim for the owners of 280 Park Ave. Vacancy rates were ballooning, and cash reserves were dwindling. But Broadway Partners and Investcorp Real Estate Group still had to service huge debt they'd taken on when they bought the 1.2 million-square-foot, two-tower property at the height of the market in 2007.
Cue the cavalry. In May, SL Green Realty Corp. and Vornado Realty Trust rode in and jointly recapitalized the property, for which the duo--Manhattan's two largest commercial landlords--held $400 million in debt. They also agreed to inject $150 million for building improvements to help lure new tenants. After contributing so heavily to the cause, the white knights owned a majority stake in 280 Park.
"We are filling a capital void," said Andrew Mathias, president of SL Green Realty Corp., referring to the number of recapitalizations in which his firm has been involved over the past few months. Several more are in the pipeline, he adds.
Nearly three years after the collapse of Lehman Brothers--and property values--New York's real...