An up-to-date feed of Fortress Investment Group real estate deals

Jonathan Gray of Blackstone, Peter Briger of Fortress Investment, Harry Macklowe and Donald Trump (Blackstone, Long Arc Capital, Getty Images)

Fortress Investment Group has played a key role in some of the biggest — and most audacious — real estate deals.

From Harry Macklowe’s infamous $7 billion purchase of part of the Equity Office Properties portfolio, to the $5.5 billion sale of Stuyvesant Town–Peter Cooper Village, to backing Trump Tower Chicago, the private equity firm has earned a reputation for gets involved in hairy projects that scare others.

Now that SoftBank is considering selling the firm, a new chapter may await Fortress, which was founded in 1998 by Wes Edens, Rob Kaufman and Randall Nardone and has $53 billion in assets under management.

Masa Son’s SoftBank took the private equity firm private in 2017 in a $3.3 billion all-cash deal to integrate the company into its Vision Fund. But as early as 2021, SoftBank was reportedly open to selling the company, which is run as a wholly independent subsidiary under an agreement with the Committee on Foreign Investment in the United States

Here are some of Fortress’ greatest real estate hits:

Equity Office properties

When Macklow made a splash to buy 7 million square feet of office space from the Blackstone Group in 2007, he put up just $50 million of his own money and borrowed $5.8 billion from Deutsche Bank.

That left him short of the $1.2 billion he needed to raise in two weeks.

“It was an absurd amount of money to find so quickly. Even in the high-stakes world of big-city real estate, it was vagabond territory,” author Adam Piore wrote in his book, The New Kings of New York. “But both [Fortress’ Steve] Stewart and Macklow knew Fortress was one of the few players who might consider it.

Fortress agreed to lend the money at an extremely high interest rate — north of 15 percent — and with personal guarantees from Macklowe. When Lehman Brothers collapsed and the market collapsed, Macklowe defaulted on his loans and lost most of his office properties, including his beloved GM Building.

Most recently, Fortress loaned Macklowe $192 million to refinance his Tower Fifth development, where he plans to build a 1 million-square-foot office tower that will rise 1,500 feet into the sky.

City of Stewie

Stuyvesant Town (Getty)

Stuyvesant Town (Getty)

When Tishman Speyer and BlackRock defaulted on their $3 billion mortgage in 2010, the massive complex, which has more than 11,000 apartments, fell into the hands of a special services company, CWCapital, which began preparing for a foreclosure auction.

Fortress, looking to expand its reach into real estate, bought CWCapital later that year for an undisclosed price. CWCapital and Fortress reportedly collected more than $45 million in fees over six years and $566 million in delinquent interest by the time Blackstone bought Stuy Town in 2015.

Times Square

The private equity group is backing two transformative development projects at the crossroads of the world.

Fortress is partnering with L&L Holding on the $2.5 billion TSX Broadway (aka 1568 Broadway), where the developers raised the landmark Palace Theater 30 feet to make way for their retail and hotels. The 470-foot-tall tower with 669 keys is due to open next year.

Nearby, Fortress is also partnering with Maefield Development on the $1.5 billion Edition Hotel project at 20 Times Square. That tower has been mired in controversy, however, with lender Natixis foreclosing on Maefield and Fortress’s lease on the property this year. (The developers still own the land below.)

Trump Tower Chicago

Long before Donald Trump became president, Fortress gave him a $130 million mezzanine loan in 2005 to build his Trump International Hotel & Tower in Chicago.

By 2012, Fortress had reportedly written off more than $100 million in debt, a move that caught the attention of then-Manhattan District Attorney Cyrus Vance, who reportedly subpoenaed the firm in 2020 as part of an investigation into the former president and his company.

Sheffield

When Kent Swig’s planned condominium redevelopment of the 845-unit rental tower in Sheffield, south of Columbus Circle, began to fall apart around 2008, he turned to Fortress to save it.

The entrepreneur came up with a scheme where Fortress would buy a stake in the project’s mezzanine debt and foreclose on the property. Swig agreed not to declare the project bankrupt and to surrender its condo plan — giving Fortress a clear path to completing the project.

“I’m going to let you be rough on me and push me,” Swig told Fortress executives, according to The New Kings of New York. “I know you like to play rough. You can knock me off the road and you’ll make a lot of money.

At the foreclosure auction, Fortress paid less than $100 million for the building — which Swig had purchased three years earlier for $418 million, predicting it would bring more than $800 million.

“We stole a building in broad daylight,” a senior Fortress executive later said of the deal.

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