Helmsley Carlton House Sells for $170MM

The estate of real-estate baroness Leona Helmsley has signed a deal to sell one of its prime Manhattan hotels for about $170 million, in a sign that investor appetite is keen for trophy assets.

The sale of the Helmsley Carlton House to a venture of private-equity firm Angelo, Gordon & Co. and Extell Development Co. also marks the beginning of the final act of the Helmsley saga in which the properties accumulated over four decades by the late Harry Helmsley are going to be sold.

When Mrs. Helmsley, who inherited the empire, died in August 2007, her estate began moving to sell properties. But those plans were shelved when the credit crunch and recession unhinged the commercial real-estate market.

While that sector is still suffering from the downturn, a growing volume of distressed property and trophy assets are attracting attention from investors who have accumulated large war chests in hopes of taking advantage of market woes. The buyer of the Carlton House, Angelo Gordon, raised a total of $2 billion in 2006 and 2007 and had spent only 25% of that capital until mid-2009, when the firm began buying again, according to an investor in its funds. Located in the heart of the tony Madison Avenue shopping district, the retail space in Carlton House is among the most valuable in the world. [ read more ]