Top Ten Worst Commercial Real Estate Busts

The top ten high profile cases of victims of the economy are listed below as found on agentgenius.com, many of which are in New York City and involve office buildings.

10. The Watergate Hotel in Washington, D.C. ($25 million)

The Watergate Hotel went into foreclosure after the owner defaulted on a $40 million loan, but the plan to refurbish the 251-room hotel may still happen, although a legal dispute between the bank and neighboring residents has delayed these efforts.

9. Resorts Casino Hotel in Atlantic City, NJ ($115 million)

Although this is Atlantic City's first casino, it was not shielded from the effects of the economy. Fewer visitors and declining revenues caused mortgage troubles to mount in late 2008. The next year it's keys were handed over to lenders.

8. Maui Prince Resort in Maui ($192.5 million)

An investment fund run by Morgan Stanley joined forces with a local firm in Maui to buy this resort in 2007 for $575 million to develop it. When tourism dropped in  the state due to recession these plans could not be fulfilled.

7. Pearson Building in New York City ($241 million)

This building was lost in an auction to Otera Capital for $241 million, according to CoStar Group, less than half what Macklowe Properties paid for it in 2006.

6. Canyon Ranch in Miami ($308.5 million)

The renovated Carillon Hotel opened in 2008 as a hotel and condominium under the name of Canyon Ranch. Economic downturn soon had its effects on the hotel and its developers handed over the 300-plus unsold condos to its creditors. Now the Canyon Ranch development plans seem to be in recovery.

5. Universal City Plaza in Universal City, California ($304.8 million)

This property became one of the more high-profile casualties of the Southern California commercial real estate market since the start of the recession. The Plaza is home to a number of media and entertainment companies, including NBC Universal and Universal Music, but this 36-story building is now jointly owned by a pair of East Coast distressed investment firms.

4. John Hancock Tower in Boston ($660.6 million)

A New York City-based investment firm bought this New England office building for $1.3 billion with huge amounts of financing, with the hopes that Boston's office rental market and commercial property values would remain red hot. A decline in property values and a spike in the unemployment rate dramatically weakened demand for office space across the country.  The property was sold in a foreclosure auction for less than half of the original purchase price.

3. Treasure Island Hotel Casino in Las Vegas ($775 million)

Due to the difficult economic climate and hopes of raising quick cash, the casino operator sold the resort and its famous pirate battle display for a $775 million to Kansas billionaire Phil Ruffin.Various estimates have placed the site's value at about four times that amount, according to CoStar Group.

2. General Motors Building in New York City ($2.9 billion)

In 2007, Harry Macklowe acquired seven Manhattan office buildings from private equity giant Blackstone Group. The loans used to make those purchases became nearly impossible to refinance once credit markets started to freeze up. Macklowe's firm was then forced to sell off his most prized trophy: the General Motors building.

1. Stuyvesant Town & Peter Cooper Village in New York City ($3 billion)

MetLife put this 11,000-unit apartment complex on the block in 2006, and it quickly started a fierce bidding war. In three years buyers began defaulting on the massive amount of debt used to finance the purchase, and handed over the property to creditors.