Olshan Represents Client in Sale of Stake in 1601 Broadway for $121M
The Real Deal reported on the sale by an Olshan client to SL Green for a stake in 1601 Broadway for $121 million. The sale is a remarkable example of how three different areas of Olshan’s expertise came together over the last year: our real estate, litigation and bankruptcy teams worked together to achieve a litigation victory and a fast sale of our client’s ground leased fee position to SL Green, the day after a TRO expired by its terms. In the 1980’s, our client had created a sophisticated ground lease for a new hotel in Times Square which, together with an adjacent parcel, operated for decades under the “Crowne Plaza” flag. In the 2010’s, Vornado, a public REIT that owned the hotel, leveraged its position with new debt, including a mezzanine loan. After a default in rent and in the payment of property taxes, the debts were purchased at a big discount by a non-institutional investor.
SL Green outbid others, including the new investor, for our client’s position, but the offer was subject to a right of first refusal in favor of the defaulted ground tenant. The new investor tried to exercise the ROFR without curing the defaults and filed suit and a request for injunctive relief to block the sale. Olshan was able to obtain a court order conditioning a TRO on the cure of rent and tax defaults within three days.
Predicting that the new investor would not cure the defaults, the Olshan real estate team closed the $121 million deal in three business days.
The Olshan team on the matter was led by real estate lawyers Thomas D. Kearns, Samuel P. Ross and Hyman Kindler with assistance from Dov Brandstatter, Amy Lu and Yael Mandel and by litigator Jeremy King with assistance from Theodore Hawkins, Kerrin Klein and Maximilian Ferlesch. Bankruptcy partners Adam Friedman and Jonathan Koevary advised on potential creditors rights issues.