Macklowe son to take helm of real estate firm

Harry and William Macklowe, the father-son duo behind Macklowe Properties Inc., avoided financial collapse during the weekend by selling the crown jewel of their real-estate empire, the General Motors Building in Manhattan. But now the son is pushing his father aside.

(WSJ) -- William Macklowe is expected within weeks to take the helm of the family enterprise, succeeding his father, who has built and lost two real-estate empires in his 30 years of investing and developing. The elder Mr. Macklowe will step down as chairman partly at the insistence of his son, according to people familiar with the matter.

The move caps months of friction between the father and son as they tried to save their empire. William Macklowe blames his father for making numerous mistakes that led the company to the brink, particularly his handling of the family company's $7 billion purchase of seven Manhattan office buildings from Blackstone Group LP at the peak of the market last year. That deal proved to be fateful largely because the elder Mr. Macklowe, 70 years old, personally guaranteed a $1.2 billion loan from Fortress Investment Group.

The elder Mr. Macklowe also resisted his son's efforts to quickly reduce their risk. "The issue was my father seeing the victory of the deal as closing of the transaction. I saw victory as exiting the transaction," William Macklowe says.

The Macklowes only avoided collapse this weekend by selling the GM Building and three other properties to a group led by Boston Properties and Goldman Sachs Group Inc. for $1.5 billion, plus the assumption of $2.5 billion in debt. But the family paid dearly to get the deal done, agreeing to give up $1.4 billion in cash it has made off the GM Building and other properties to keep creditors at bay.

Behind the sale is a tale of a deteriorating relationship between a father and son in one of New York's storied real-estate families. While other families, like the Dursts and the Rudins, have seamlessly passed on the mantle to the next generation, the Macklowes did it during a time of crisis, creating a clash between father and son. "He's my father. I'm his son. Life goes on," says William Macklowe, 40, declining to speak publicly about his relationship with his father.