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. Last Updated: 07/27/2016

GM Building Sells for Record $1.4Bln in N.Y.

NEW YORK -- Harry Macklowe, the developer whose career has died a thousand deaths, came alive again late last week when he signed a contract to buy the 50-story General Motors Building for a record-setting $1.4 billion, the most ever paid for a skyscraper in the United States.

The big gold letters, Trump, that spelled out the name of a former owner of the GM Building were stripped from the marble exterior of the tower at the southeast corner of Central Park earlier this year. But do not expect Macklowe, the man who became infamous 18 years ago for his connection to an illegal demolition in Times Square, to splash his name over the skyscraper.

According to one person who knows him, Macklowe has more tasteful plans for the building, whose tenants include Estee Lauder; the Bank of America; Weil, Gotshal & Manges; and the CBS-TV studios.

If the deal is completed in a month as expected, Macklowe will be paying $1.4 billion, or about $800 per square foot, the most by far for a single office tower and on a square-foot basis, said Gerard Mason, executive managing director of Granite Partners, a real estate investment bank that tracks building sales nationwide.

Although office rental rates are down and vacancies up in New York, sales of first-class office towers have remained strong.

"This price is a testament to lower interest rates, a global belief in the Midtown market and the resilience of trophy buildings in any market cycle,'' said Mary Ann Tighe, of the CB Richard Ellis real estate firm.

The sale is also a sign of the enduring importance of cities, said Meyers Mermel, a broker who represented one bidder, and of New York's pre-eminent position for foreign and domestic investors.

Macklowe issued a terse statement Friday saying that his company, Macklowe Properties, had entered into a deal to buy the building from a subsidiary of Conseco Inc., the Indiana-based financial services company that is struggling to emerge from bankruptcy protection.

A successful deal would be yet another resurrection for Macklowe and financial salvation for Conseco.

Macklowe, like many New York developers, lost a string of buildings to lenders during the recession in the mid-1990s. Three years ago, he was planning his comeback as a commercial developer with a major new office tower on Madison Avenue. But he got into a dispute with his bank and was forced to abandon the project. He and his son William continued to develop smaller projects in Manhattan until the GM Building came along.

Conseco bought the tower in 1998 for about $878 million in partnership with Donald Trump, who put up only $11 million for his half-stake in the property. Conseco guaranteed $700 million in financing, while Trump ran the building. But Conseco soon collapsed under the weight of its debt and the partners had a falling out. They settled their differences after Trump lost a court battle in June, clearing the way for a sale. Trump's name came off the building the next day.