The office space at Metropolitan Tower on West 57th Street is on the verge of a change in ownership as GDS Development Management and Sabal Investment Holdings collaborate with lender Aareal Bank to acquire the defaulted loan on the office section of the Plaza District’s renowned structure. In a strategic move, experienced operators Michael Kirchmann and Alan Rudikoff of GDS, along with Sabal’s Tal Seder, formed a joint venture to secure the $92.5 million loan at a favorable rate. Although the new owners remain discreet about their plans, industry analysts speculate that a foreclosure and subsequent takeover may be in the cards.
The acquisition, facilitated by a Newmark team led by Adam Spies and Dustin Stolly, underscores the proactive response of GDS and Sabal to the prevailing market dynamics. Seder, as Sabal’s Head of Opportunistic Investments, highlighted the necessity for innovative asset management and value-add solutions in today’s market.
Aareal Bank’s decision to stay involved in the joint venture indicates confidence in the new owners’ ability to stabilize the property rather than opting for a significant discount on the loan. This decision follows the bank’s earlier attempt to sell the loan earlier in the year.
The 68-story mixed-use Met Tower, developed by Harry Macklowe in 1987, has faced recent challenges, with WeWork rejecting its space within the tower during the early stages of bankruptcy. The new owners now face the task of revitalizing the property, which includes residential condominiums above the office space. L&L Holding, led by Rob Lapidus and David Levinson, originally acquired the 18-story office portion in 2006 with BlackRock. In 2016, the majority of equity was sold to the Mitsubishi Corporation through a fund administered by GreenOak Real Estate, which subsequently merged with Bentall Kennedy in 2019.
