Economy Watch: Investor Bags Helmsley Carlton House for $170M

March 10, 2010
By Dees Stribling, Contributing Editor

Courtesy Flickr Creative Commons user scaredy_kat

Private-equity firm Angelo, Gordon & Co. and Extell Development Co. have agreed to buy the Helmsley Carlton House in Manhattan for about $170 million, according to Tuesday’s Wall Street Journal. The Madison Avenue property is currently owned by the estate of the late Leona Helmsley, and sports some of the most expensive retail space anywhere.

Helmsley’s estate, which also holds the Park Lane Hotel, the New York Helmsley, a stake in the Empire State Building and other properties, had planned to sell off its assets earlier. But the Queen of Mean died right as credit started to dry up and the real estate bubble started to deflate in 2007, so the sales were put off.

On the buyers’ side of the deal, purchases were also put off. The Journal noted that Angelo Gordon raised a real estate war chest totaling about $2 billion between 2006 and ’07, but managed to use only about a quarter of it until late last year.

So Long, Martin, So Long, Osa

Ahead of releasing its fourth fiscal quarter numbers, American Eagle Outfitters Inc. has pulled the plug on its Martin + Osa clothing store chain, as well as the online business under the same name. All together, the company will close 28 Martin + Osa locations by the end of its second fiscal quarter in July.

The recession knocked the stuffing out of the fledgling brand, launched only in 2006 and aiming toward a market older than the teen-to-young adults sought by American Eagle. In the company’s fiscal 2009, Martin + Osa sustained a $44 million loss, including a non-cash impairment of about $11 million.

“Closing Martin + Osa was a difficult decision, particularly in light of the progress that was made over the past year,” Jim O’Donnell, American Eagle CEO, said in a statement. “However, it is in the best interest of our company and stakeholders to focus our efforts on the brands that… have the highest potential.”

Liberty International to Break in Two

Liberty International, a British company that owns about £6.1 billion ($9.1 billion) in commercial real estate, is dividing itself into two new companies in the wake of declining property values and losses. The two new entities will be Capital Shopping Centres, a retail REIT with a market capitalization of £2 billion, and Capital & Counties, with a capitalization of about £1 billion, which will own property in the London districts of Covent Garden and Earls Court.

Liberty management said that the division would enable the successor companies to more closely focus on their specialties. Liberty lost £329 million in 2009, compared with £2.7 billion in 2008, and its properties lost 10.6 percent of their aggregate value last year.

Exactly a year after its recessionary low point on March 9, 2009, Wall Street managed a small gain on Tuesday.The Dow Jones Industrial Average was up 11.86 points, or 0.11 percent. The S&P 500 advanced 0.17 percent and the Nasdaq gained 0.36 percent. One year ago, the Dow stood at 6,547.05; at the end of the day Tuesday, it stood at 10,564.38, a 61.63 percent gain.