Bargain hunters have scooped up the distressed debt on the office portion of the Met Tower building — a deal that could lead to one of the first big takeovers in the Plaza District.
GDS Development Management and Sabal Investment Holdings entered into a joint venture with lender Aareal Bank on the defaulted loan backing L&L Holding’s office portion of the 68-story, mixed-use tower at 142 West 57th Street, the investors told The Real Deal.
While the new owners did not elaborate on their plans for the property, the purchase by a pair of experienced operators is a sign that they will seek to foreclose and take it over.
“Today’s market calls for innovative asset management and value-add solutions,” said Tal Seder, Sabal’s head of opportunistic investments.
A Newmark team led by Adam Spies and Dustin Stolly marketed the debt.
GDS, headed by Michael Kirchmann and Alan Rudikoff, and Sabal got the $92.5 million loan at a slight discount, according to a source familiar with the deal.
Aareal Bank had put the loan up for sale earlier this year. Its decision to stay in the joint venture indicated that it was not willing to let the loan go for a steep discount and had faith that a new operator could stabilize the property.
The new owners will have their work cut out for them: Met Tower is among the locations that WeWork rejected two weeks ago in the early stages of its bankruptcy. The coworking company leased about 78,000 square feet at the building in 2016.
Rob Lapidus and David Levinson’s L&L bought the 18-story office portion of the tower for an undisclosed amount in 2006 with BlackRock. Harry Macklowe in 1987 had developed the building, which has residential condominiums above the offices.
L&L and BlackRock sold the majority of the equity in 2016 to the Mitsubishi Corporation through a fund administered by GreenOak Real Estate, which merged with Bentall Kennedy in 2019.