BlackSwan Zine

by CJ Follini

The  J.D. Carlisle Development Corp. submitted a preliminary bid $80 million for the five-building complex that once housed the Cabrini Medical Center—44% less than the bankrupt institution needs to pay off its creditors.

On Friday, Grubb & Ellis filed a motion in the Bankruptcy Court for the Southern District of New York to approve the bidding procedure and set a date for the auction. A hearing will be held on Dec. 16 for approval of the Contract of Sale.

An auction for the Gramercy Park-area property where the starting bid will be $80 million will be subsequently be held in mid-January. The Carlisle bid includes a $3million breakup fee and is conditional upon receiving the buildings vacant.

It is unlikely that the property will garner a higher price in the current market given the current residential market, the poor condition of the buildings, and necessity for a zoning variance to allow residential use. The pending Purchase Agreement filed with the Court also requires the Debtor (Cabrini) to deliver the asset vacant. There are currently seven tenants with leases at the former Cabrini Medical Center.

There were 14 preliminary bids for the 450,000 square foot property which is located between East 19th and East 20th streets and Second and Third Avenues. An auction is expected to be set for January 16, 2010.

Cabrini ceased operating as a hospital in March 2008 and filed for bankruptcy over this past summer.