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NEW YORK CITY — The Financial Times Building, a 42-story office tower located in Manhattan, New York City, has been sold at auction after one of its creditors foreclosed on the property. Otera Capital Corp., a subsidiary of Canada’s largest pension fund, foreclosed on the property after the building’s owner, Macklowe Properties, defaulted on a $130 million mezzanine loan in January.

According to Reuters, Otera was the only party to place a bid at the auction, and it acquired the property with the minimum bid of $100,000. Otera will now assume the property’s $240 million senior mortgage, which is held by German American Capital Corp., an affiliate of Deutsche Bank.

A spokesperson for Otera stated that the company took control of the property in order to protect its investment, but it believes that the Financial Times Building is a unique property that is well positioned for the future once the economy turns around.

The Financial Times building is located at 1330 Avenue of the Americas. The building most prominently houses the offices of the Financial Times, a business newspaper headquartered in London. It was between 65 and 70 percent occupied at the time of the auction. The current recession has dropped the value of the building greatly since it was first acquired by Macklowe Properties at the end of 2006 for $498 million.

A year after acquiring the Financial Times Building, Macklowe Properties acquired a seven-building Manhattan office portfolio for $7 billion, but the portfolio was taken over by the lender, Deutsche Bank, shortly after the purchase when Macklowe was unable to secure permanent financing for the properties. The company also lost control of the General Motors Building, which had been put up as collateral in the transaction and was sold to pay off the debt.

— Coleman Wood

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