The special servicer for a $12.25 million securitized loan filed a pre-foreclosure action in U.S. District Court in Manhattan against a Crown Acquisitions affiliate that owns a two-story retail building at 270 East Fordham Road in Fordham Heights, the Bronx. The lender alleges a maturity default, as it matured May 1, 2023 and was not paid off, and seeks the appointment of a receiver.
The special servicer, Midland Loan Services filed the action on behalf of the bond holders of the Morgan Stanley Bank of America Merrill Lynch Trust 2013-C10, Commercial Mortgage Pass-Through Certificates, Series 2013-C10.
Memorandum of Law 262 East Fordham Road MOL
Many retail owners have had trouble with maturity defaults in a market battered by online shopping and covid disruptions to shopping patterns, including Jeff Sutton, Joseph Sitt’s Thor Equities, and others.
The Chera family of Crown Acquisitions through the entity 262 East Fordham Realty LLC bought the 20,757-square-foot retail property in 2004 for $7 million. At the time the owner entity was in care of the Chera family’s children’s clothing brand Young World.
In April 2013 their entity borrowed $12.25 million, naming Crown Acquisitions as the sponsor and Haim Chera, at the time an executive at Crown, as the guarantor. The main tenant during the life of the loan, Modell’s Sporting Goods, declared bankruptcy in March 2020, saying it would close all stores. It vacated this location some time before August 2020, when discount retailer Pretty Girl replaced it on the first and second floors. Haim Chera is now an executive at Vornado Realty Trust.
Kassin Sabbagh Realty is currently marketing that larger space for lease. The property had income of about $1 million and a net operating income of $544,791 at the end of 2012, according to loan securitization documents.
The retail building at 270 East Fordham Road in Fordham Heights has 20,757 square feet of built space and 4,294 square feet of additional air rights for a total buildable of 25,039 square feet according to a PincusCo analysis of city data. The parcel has frontage of 74 feet and is 100 feet deep with a total lot size of 7,279 square feet. The lot is irregular. The zoning is C4-4 which allows for up to 3.4 times floor area ratio (FAR) for commercial and up to 3.44 times FAR for residential. The city-designated market value for the property in 2022 is $8.4 million.
On this tax block, PincusCo has identified the owners of seven of the 15 commercial properties representing 151,550 square feet of the 310,544 square feet. The largest owner is Casablanca Management, followed by Jenel Management and then Michael Friedman. There are no active new building construction projects on this tax block.
Within a 400-foot radius of 270 East Fordham Road, PincusCo identified four commercial real estate items of interests occurred over the past 24 months. Of those four items, one was in new building development. It was a new building permit issued on April 20, 2022 for a 42,831-square-foot residential (R-2) building with 57 residential units at 2468 Tiebout Avenue. Of those four items, one was for major renovation including a certificate of occupancy change. It was a permit application filed on April 13, 2022 for the $4.4 million renovation of 74,897-square-foot educational (E) building with zero residential units at 2510 Valentine Avenue. Of those four items, two were loans above $5 million totaling $14.4 million. The most recent of the two was Faraj Srour in which borrowed $6 million from Preferred Bank secured by the 40,657-square-foot, four-unit mixed-use building (K4) on 2510 Valentine Avenue on April 19, 2022.