Bloomberg News

Lehman Said to Sell Stake in New York Building to JPMorgan Fund

June 27, 2011

June 27 (Bloomberg) -- Lehman Brothers Holdings Inc. agreed to sell its stake in Manhattan’s 200 Fifth Ave., the former International Toy Center, to a real estate fund run by JPMorgan Asset Management, two people with knowledge of the deal said.

The fund paid about $700 million for Lehman’s majority interest, said the people, who asked not to be named because details of the transaction are private. The building’s tenants include Tiffany & Co., which has 260,000 square feet (24,150 square meters) of offices, and Eataly, an Italian food emporium.

Lehman, which filed for bankruptcy almost three years ago, has been planning real estate sales as values for its properties increase. Chief Executive Officer Bryan Marsal said on Dec. 30 that the firm would bring “some very high-quality assets” to market in the first half of 2011.

The company, in a partnership with New York-based real estate investor L&L Holding Co., bought 200 Fifth Ave. in 2007 for $480 million, according to property records. L&L, which manages the 800,000-square-foot building, remains an owner, one of the people with knowledge of the transaction said.

The Wall Street Journal reported the deal earlier today.

Brokerage Eastdil Secured LLC represented Lehman in the sale of its stake. Kimberly Macleod, a Lehman spokeswoman, declined to comment on the deal, as did Kristen Chambers, a spokeswoman for JPMorgan. David Levinson, chairman and CEO of L&L, didn’t return a phone message left at his office.

Lehman, once the fourth-largest investment bank, listed real estate assets of $23 billion the day before its Sept. 15, 2008, bankruptcy, the largest in U.S. history. Its properties had a market value of about $14 billion nine months later, the New York-based company said in court papers.

The bankruptcy case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

--With assistance from Linda Sandler in New York. Editors: Kara Wetzel, Christine Maurus

To contact the reporter on this story: Oshrat Carmiel in New York at ocarmiel1@bloomberg.net.

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net


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