Billy Macklowe has snapped up the troubled loan on a Tribeca office building.
The William Macklowe Company bought the $46 million note tied to 291 Broadway as the loan barreled toward foreclosure, The Real Deal has learned. Lender Flagstar Bank sold the note to Macklowe for slightly less than the balance of about $45 million, per a source with knowledge of the deal.
The note sale comes after Flagstar sued owner Sutton Management in July to foreclose on the 129,000-square-foot property, alleging the borrower stopped making payments at the end of 2024. As of June 30, the landlord allegedly owed $48.6 million in principal and other fees, according to court documents. The property went into receivership in August.
The 10-story building, at the corner of Broadway and Reade Street, was built in 1911 and originally housed the East River Savings Bank. If Macklowe forecloses or takes a deed-in-lieu, the building could be next in line for a residential conversion. Newmark’s Adam Spies and Joshua King brokered the note sale.
New York Community Bank, now known as Flagstar, provided the $46 million loan in late 2019, when office values were still near their peak. But the post-pandemic office slump has been particularly punishing for older, non-Class A buildings downtown, where rising vacancies, leasing concessions and higher interest rates have strained owners’ cash flow.
The building’s largest tenant is dance studio Downtown Dance Factory, which occupies 13,000 square feet on the fourth and fifth floors, according to CoStar data. Earlier this year, law firm Rose & Rose left 291 Broadway after 30 years in the building, according to the Commercial Observer. The building is 95.8 percent leased, per CoStar.
Other current tenants include law firms Mirman, Markovits & Landau and Neil Weinrib & Associates and Ya Ya Mandarin Immersion Preschool.
Billy Macklowe, the son of real estate heavyweight Harry Macklowe, left his dad’s company in 2010 to start his own real estate development and investment firm. Macklowe recently completed construction of a mixed-use development in Park Slope, his first Brooklyn development. Macklowe also developed a 52-unit condo building at 21 East 12th Street.
Sutton Management’s Abraham Sutton did not immediately respond to requests for comment. Macklowe declined to comment.
Rich Bockmann contributed reporting.
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