January 7, 2008 / 1:58 AM / in 11 years

Vornado bought stake in Macklowe debt-report

NEW YORK, Jan 6 (Reuters) - Vornado Realty Trust (VNO.N) (VNO.N) bought a stake in loans collateralized by four of Macklowe Properties’ buildings, betting it might snare some great real estate on the cheap, the New York Times reported on Sunday, citing unnamed bankers and real estate executives.

The Times also said that Stephen Ross, chairman of the real estate company Related, has been talking to founder Harry Macklowe about a deal for Macklowe Properties’ Drake Hotel site, at Park Avenue and 56th Street in Manhattan.

The paper, citing real estate executives, said another rival developer, Sheldon Solow, may buy some of Macklowe’s debt in a bid to gain control of Macklowe’s G.M. Building in Manhattan. A spokesman for Solow told the Times that Solow was not trying to acquire any of the debt.

The Times reported that Macklowe has a $6.4 billion debt payment coming due next month in connection with his purchase of seven other Midtown Manhattan office buildings a year ago.

The owed payment comes amid a real estate downturn and a credit crunch, making it tough for property owners to refinance deals or generate cash flows for debt payments.

Macklowe representatives were not immediately available for comment.

Reporting by Michael Flaherty; Editing by Tomasz Janowski

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