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Bank remains mum on rumors of building buy.

Rumors have been trading among investment sales brokers and real estate investors that SL Green may be arranging a sale of 19 West 44th Street to the German bank, DekaBank.

Another person close to the sale cautioned that the auction wasn't yet over.

SL Green put the roughly 300,000 s/f. nearly fully leased property up for sale earlier this summer, an offering first reported by Crain 's.

The sale was generally regarded by those familiar with SL Green's real estate investment strategy as in line with the company's long practice of trading older, less prominent office buildings in its portfolio for newer, higher quality properties.

The company, which is the largest commercial landlord in Manhattan, has been one of the most active real estate investors in the market this year, buying two office buildings, 600 Lexington and 125 Park Avenue, in recent months.

The firm also has used debt positions it holds against other properties to foreclose. The company took over 100 Church, foreclosing on the Sapir Group, via a mezzanine loan it held against the property.

More recently it tried to take over the new office tower developed by Harry Macklowe, 510 Madison Avenue, after buying up its senior mortgage and pieces of its mezzanine debt and then attempting to foreclose.

The deal, if it happens, would come a few weeks after another Manhattan investment came to a surprisingly favorable conclusion for DekaBank.

The bank had extended a $60 million senior mezzanine to the W Hotel in Union Square.

The property went into default and a junior mezzanine lender, LEM Mezzanine, took control of the property earlier this year and thrust it into bankruptcy. It appeared for a time that DekaBank may not be able to recoup its loan, but the property was sold earlier this summer to the hotel operator Host with an arrangement included in the deal to repay the bank.

"Please understand, that we do not comment on any rumours [sic] in the market," Miriam Breh, a spokeswoman for DekaBank wrote in an email to Real Estate Weekly.
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Comment:Bank remains mum on rumors of building buy.
Author:Geiger, Daniel
Publication:Real Estate Weekly
Date:Aug 25, 2010
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