The U.S. Marshals Service deals with the most dangerous criminals and situations: tracking down fugitives; running the witness protection program; transporting murders; mobsters and drug kingpins; protecting dignitaries. But even this elite force may have met its match in an organization even more fearful than La Cosa Nostra or El Chapo’s drug-trafficking network: A luxury New York City condo board.
A battle is brewing over the property, which the U.S. Department of Justice is selling after seizing it as part of a civil forfeiture action related to the Malaysian 1MDB corruption scandal. In an effort to block the sale from going through at such a low price, the Walker Tower condo board plans to exercise its right of first refusal, buying the condo itself for the same sum, then relisting it for more.
At issue is what was once the priciest condo ever sold in lower Manhattan: the top-floor penthouse went for $50.9 million six years ago. The only problem was, that money didn’t belong to the buyer, Abu Dhabi businessman Khadem Al Qubaisi, but to Malaysia’s sovereign wealth fund 1MDB, the beneficiaries of which had quite the taste for extravagant pieds-a-terre. So the Justice Department seized it and had the Marshals list it for $35 million, already a pretty nice discount. But in spite of a few bids in that range, the Marshals sold it for just $18.25 million a few weeks ago, which is not welcome news to the remaining residents who paid a great deal more for the building’s less-elevated spaces. Although, in fairness, it’s not the Marshals’ problem anymore.
"The contract price can only be described as steeply distressed and unrealistic and one which could adversely affect the market value of other homes at Walker Tower," said David Berkey, an attorney for the condo board. "The board is acting in the best interests of all Walker Tower owners by exercising its right of first refusal."
He said the board plans to put the penthouse back on the market "to ensure that its value is recognized…."
It’s not clear if the prospective buyer for the unit, who couldn’t be identified, will fight the board’s move to buy the property.
Exercising a right of first refusal almost never happens, since now, presumably, the other condo owners have to pony up $18.25 million. But the Marshals may be dealing with it again over alleged 1MDB mastermind Jho Low’s place over at the Mandarin Oriental, which also went for a relative song, albeit not quite as loud as the one at the Walker.
That penthouse sold for $23 million in late May, short of the $30.55 million it traded for in 2011.
In any event, if you’re interested in paying more than $18.5 million for five bedrooms and sprawling terraces with 360-degree views in an Art Deco landmark 24 stories over 18 Street, get in touch with the Walker’s condo board.