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FC Partnership remained at $40,000 for each ownership unit.
In July 1988, when the New York City real estate market was
thriving, the FC Partnership refinanced its mortgage on the
Partnership Properties. As a result of additional funds that
were available to the FC Partnership from this refinancing, the
FC Partnership made a special cash distribution of $140,000 to
each general partner with respect to each ownership unit in the
partnership.
In 1988, for purposes of refinancing its mortgage, the FC
Partnership obtained from Cushman & Wakefield, Inc. (C&W), an
appraisal of the Partnership Properties (1988 C&W report). Using
for its methodology comparable sales and income capitalization
and assuming that economic conditions and the New York City
commercial real estate market would continue to improve, the 1988
C&W report concluded that, as of May 9, 1988, the estimated fair
market value of the underlying Partnership Properties equaled
$110 million. The 1988 C&W report did not attempt to value the
FC Partnership, nor an ownership unit in the FC Partnership.
In the spring of 1989, Mr. Silver was informed that CUNY had
decided to build its own campus and that when the new campus was
completed in 1994, CUNY would terminate a large portion of its
lease of the Partnership Properties.
During the early and mid-1980's, real estate leasing
activity in midtown Manhattan increased each year.
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