Deutsche Bank is still in talks with real estate investment firms RCG Longview and George Comfort & Sons over the sale of New York’s Worldwide Plaza after the bank this week pulled out of a deal with the firms.
According to sources, the signed deal collapsed after Deutsche Bank’s board of directors in Germany rejected the way the transaction was structured.
As part of the deal, Deutsche Bank was reportedly set to reduce an $800 million-plus mortgage to around $450 million and form a joint venture with the buyers, who would inject around $175 million of equity into the deal. A $50 million deposit was put down by RCG and the Comfort team with the transaction expected to close by 30 June.
However, the deal failed to meet the approval of Deutsche Bank’s board amid concerns the firm would be left with too much equity risk, sources have said.
Comfort president and chief executive Peter Duncan told the New York Observer this week both he and RCG Longview were “disappointed” over the deal’s collapse, but they remained “ready, willing, able and eager” to close on the acquisition.
“We have an executed sales contract, a significant hard deposit in place, and even a closing date of June 30th from the seller’s attorneys. We are ready to close,” stated Duncan. He added he was hopeful the seller would proceed with the closing as scheduled.
Deutsche Bank declined to comment. RCG Longview and Comfort & Sons were unavailable for comment at press time. However, people familiar with the situation said the bank was in a “sensitive stage” of discussions about the future of the 1.8 million-square-foot Eighth Avenue office building.
Deutsche Bank took over the Worldwide Plaza and six other landmark properties after previous owner and real estate mogul Harry Macklowe defaulted on the debt that financed his $7 billion acquisition of the buildings. The Worldwide Plaza is the last asset to be sold by the bank.
The bank could make a counter-offer to Comfort and RCG Longview. Two other parties are also believed to be interested in making an offer for the property, sources added.