$10.5M pre-foreclosure filed at Feil Org. retail in Gramercy

The special servicer for a loan with a $10.5 million balance filed a pre-foreclosure complaint yesterday against an affiliate of the Feil Organization which owns the 11,145-square-foot retail condominium unit at the base of the Tempo condo building at 300 East 23rd Street at the corner of Second Avenue in Gramercy.

The special servicer, LNR Partners, filed the action on behalf of investors in the securitized trust known as COMM 2014-UBS2 Mortgage Trust Commercial Mortgage Pass-Through Certificates.
Case LINK

The filing underscores the pressure retail owners, even with large, national portfolios, are under as values have declined, despite reports of increases in leasing volume and high-profile retail sales. This location was long-occupied by a Duane Reade, which vacated several years ago.

The Feil Organization, led by Jeffrey Feil, bought the condo unit in August 2013 for $16.14 million from the Tempo’s developer, Menolly Group of Ireland. Several months later, in February 2014, Feil borrowed $12 million from UBS, and that loan was later transferred into COMM 2014-UBS2.

The PincusCo database currently indicates that Feil Organization owned at least 39 commercial properties with 7,899,261 square feet, 1,647 residential units and a city-determined market value of $1.8 billion. (Market value is typically about 50% of actual value.) The portfolio has $301.9 million in debt, with top three lenders as Capital One, Granite Point Mortgage Trust, and First Republic Bank respectively. Within the portfolio, the bulk, or 51 percent of the 7,899,261 square feet of built space are office properties, with elevator properties next occupying 23 percent of the space. The bulk, or 63 percent of the built space, is in Manhattan, with Queens next at 19 percent of the space.

According to the complaint, “the unpaid balance of Borrower’s obligations under the Loan Documents includes (i) the unpaid principal amount of $10,536,527.27, (ii) accrued and unpaid interest at the non-default rate of 4.815% per annum, (iii) accrued and unpaid default interest at the default rate of 5.00% per annum… Borrower failed to pay the full amount due under the Loan Documents on the May 6, 2023, Monthly Payment Date, and on each Monthly Payment Date thereafter.”

According to a listing on Loopnet, “300 East 23rd Street, the former Duane Reade space, encompasses a two-level mixed-use opportunity to occupy 11,145 square feet, ideal for a medical, retail, or office tenant.”

The surrounding

Within a 400-foot radius of 398 2 Avenue, PincusCo identified two commercial real estate items of interests occurred over the past 24 months. One of those two items was a sale which Russell Fridman bought the 21,356-square-foot, 37-unit rental (C1) on 305 East 21st Street for $8 million from Edith Halpert, Sammy Chaim Halpert, and Chanie Engel on July 24, 2023. One of those two items was a loan which Russell Fridman borrowed $5 million from First Republic Bank secured by the 21,356-square-foot, 37-unit rental (C1) on 305 East 21st Street on July 24, 2023.

Correction: A prior version of this post identified the neighborhood as Kips Bay.

Direct link to the property’s ACRIS page.