December 19, 2016
Gamma Real Estate paid $86 million in a bankruptcy auction for parcels making up New York City’s Sutton Place site. The acquisition officially brings to an end a contentious and controversial fight between lender Gamma and developer, Bauhouse Group.
Bauhouse planned to build a high-end property on Manhattan’s East Side, turning to Gamma for the loan. But Bauhouse defaulted, then ended up in bankruptcy court. Gamma’s bid on the parcels won the land, but the lender is required to forgive a portion of the $180 million debt owed. The lender also agreed to pay an additional $12 million toward an existing commitment to purchase air rights for the project.
It’s uncertain if Gamma will move forward with Sutton Place. If so, the lender will face continued opposition from the surrounding communities, which want new zoning regulations to keep the local buildings under 260 feet.
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