$10.7M foreclosure sale set for East Harlem rental, debt owned by Magnetar Capital

UPDATED, 6:51 a.m., March 20, 2024: A Manhattan State Supreme Court referee scheduled an auction for March 20, 2024, to sell an 11-unit rental building with the address 231 East 123rd Street, in East Harlem, which has a judgment lien of approximately $10.7 million. The notice of sale was published on February 22, 2024.

The lender is an affiliate of the Evanston, Illinois-based hedge fund, Mangetar Capital, through its servicer Sharestates Investments. The borrowers are Alex Halimi and Saul Mazor. Halimi and Mazor bought the property and then in July 2015 filed plans for an 11-unit building.

In March 2022, Magnetar’s entity filed the pre-foreclosure action.

Case 850052/2022 LINK

Sharestates Investments was the originator of the loans totaling $6.1 million, which it sold to Illinois-based asset manager Magnetar Financial, which controls Chondrite Asset Trust. Sharestates is the servicer on the loans.

According to the original complaint, “That there is now justly due to plaintiff upon said note and mortgage, the combined principal sum of $6,078,000 with interest thereon at the default rate of 23.99 % per annum, plus interest rate and default interest rate adjustments thereafter, from 8/01/20 plus any sums advanced by the plaintiff.”

On May 19, 2023, Magnetar was awarded summary judgment, and then Halimi and Mazor the next month filed an appeal to the Appellate Division, First Department, but that appeal appears to have been abandoned. The Notice of Sale was filed on February 22, 2024.

The elevator building with 11 residential units in East Harlem has 11,576 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 25 feet and is 100 feet deep with a total lot size of 2,522 square feet. The zoning is R7B which allows for up to 3 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $2.2 million.

The neighborhood

In East Harlem, The majority, or 51 percent of the 52.3 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 21 percent of the space. In sales, East Harlem has near average sales volume among other neighborhoods with $406.6 million in sales volume in the last two years and is the 25th highest in Manhattan. For development, East Harlem has near average amount of major developments among other neighborhoods and is the 16th highest in Manhattan. It had 1.9 million square feet of commercial and multi-family construction under development in the last two years, which represents 4 percent of the neighborhood’s built space. There were three pre-foreclosure suit filed among other development buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of 14 of the 29 commercial properties representing 148,261 square feet of the 254,163 square feet. The largest owner is City Of New York, followed by Coalition For The Homeless and then East Harlem Council For Human Services. On the tax block, there was one new building construction project filed totaling 8,563 square feet. It is a 11-unit, 8,563 square-foot residential (R-2) building submitted by Alex Halimi with plans filed July 27, 2015 and permitted December 21, 2017.

The surrounding

Within a 400-foot radius of 231 East 123 Street, PincusCo identified two commercial real estate items of interests occurred over the past 24 months. Of those two items, two were loans above $5 million totaling $95.6 million. The most recent of the two was Certes Partners in which borrowed $68.5 million from MF1 Capital secured by the 0-square-foot, 138-unit rental (D7) on 212 East 125th Street on September 21, 2023.

Correction: A previous version of this post stated the auction date was March 30, 2024, but in fact the date was set for March 20, 2024.

Direct link to the property’s ACRIS page and link to DOB NOW portal.