Saturday 27 May 2017

Anglo to sell 230 condos in downtown Manhattan

Units may be offloaded at 40pc of their original market value

Emmet Oliver

Nationalised lender Anglo Irish Bank looks set to sell off more than 230 apartments in New York after its successful foreclosure action against a leading developer in the city.

The bank is reported to be planning a "bulk sale'' of the apartments in September according to reports from New York.

The apartments (effectively condos) may have to be sold at just 40pc of their original market value. They are located at the Rector Square development in Battery Park City, at the southern tip of Manhattan.

The bank said yesterday it could not comment because of customer confidentiality. The bank is also waiting to see whether the EU forces it to sell off larger chunks of its US asset base.

The bank has been battling New York developer Yair Levy (right) since last year and earlier this year it won an order to foreclose on the Rector Square building.

Since then Mr Levy has also been sued by the New York attorney general Andrew Cuomo for how he operated the company behind the apartment block.

Anglo won the foreclosure case after Mr Levy's company, YL Real Estate, defaulted on loans for $165m (€125m). He is also being sued by some of the residents of the development, who are complaining about problems in their units.

Anglo is believed to be selling unsold units, although some of them have tenants in them.

New York apartment prices have plunged sharply since the outbreak of the financial crisis. The Anglo condos in Battery Park City were originally valued at $1,000 per square foot, but this is now down to $400 per square foot.

Anglo remains a significant, if declining, player in the New York real estate market. The bank maintains an office in Manhattan and also owns two hotels there via an investment with a large number of Irish high-net-worth clients.

The bank has been hugely reducing its activities in the city, only extending loans to existing clients and almost eliminating entirely any business with private borrowers.

A number of private client borrowers are in dispute with the bank over their investments and have lodged papers in the Irish courts.

Anglo is awaiting a decision from the EU on whether it can become a so-called good bank/bad bank. This is expected to involve an amount of "burden sharing'', which means that bondholders in the bank could be expected to shoulder some of its losses. The bondholders in question are not likely to be those holding senior bonds in the company.

Irish Independent

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