Argentina's IRSA Increases Stake in Manhattan's Lipstick Building to 49%
IRSA Inversiones y Representaciones SA, an Argentine real estate investment company, increased its stake in New York’s Lipstick Building to 49 percent in a debt restructuring of the property, a regulatory filing shows.
The deal is part of the prepackaged Chapter 11 bankruptcy petition filed in November by owners of the tower, the 34-story Midtown office building where Bernard Madoff ran the biggest Ponzi scheme in U.S. history. The plan, approved by a judge last month, reduced the $210 million mortgage to $115 million.
“It was a total reallocation of the debt and the capital structure” of the building at 885 Third Ave., said Marc Richards, a New York-based attorney with Blank Rome LLP, which represented owner Metropolitan 885 Third Avenue Leasehold LLC.
IRSA now holds a 49 percent indirect interest in a new company that controls the property, called the Lipstick Building for its elliptical shape and red granite exterior. The Buenos Aires-based developer bought a 35 percent stake in the building in 2008 from Tao Tsuot Ltd., an Israeli investment company.
An IRSA spokesman in Buenos Aires confirmed the deal.
Metropolitan cited lower lease renewal rates and “liquidity issues” as reasons for its bankruptcy filing. The company bought the tower for $648.5 million in 2007, near the peak of the U.S. real estate market.
A loan from Royal Bank of Scotland Group Plc is now the only debt on the building, Richards said. The cash flow is now “more than sufficient” to cover debt service, he said.
IRSA, which owns shopping centers, hotels and residential property, had its credit rating raised last month by Standard & Poor’s to B, five levels below investment grade.
To contact the reporter on this story: David M. Levitt in New York at dlevitt@bloomberg.net
To contact the editor responsible for this story: Kara Wetzel in New York at kwetzel@bloomberg.net
Rate this Page