Lender sues over allegedly defaulted $12.5M East Village loan at costume shop

Rialto Capital Advisors through the entity RSS WFRBS2013-C14 – NN 8ba, LLC, filed to recover $12.5 million in debt secured by Marc. P Beige’s retail condominium at 808 Broadway, a mixed-use condo building in the East Village. The lender declared the note in default in May 2021, according to the court filing.

The retail space has been home to costume shop New York Costumes Halloween Adventure since 1996. The costume store holding company, Rubie’s Costume Company, has been in business for 70 years and earlier this year emerged from bankruptcy.

This is not a foreclosure action. It is a suit seeking a judgment to recover the loan and the guaranty.

The commercial broker Adelaide Polsinelli of Compass put the condo on the market asking $15.95 million, The Real Deal reported last month.

In May 2021, PincusCo reported that Rialto acquired the loan.

The retail condo property has 21,633 square feet of built space according to PincusCo analysis of city data.

Beige, who is the CEO of Rubie’s Costume Company, according to his LinkedIn profile, bought the unit in 2017 for $24.6 million from Lennox Capital Partners, and at the same time Beige assumed the $12.5 million in debt originally provided in 2013 and securitized into the WFRBS Commercial Mortgage Trust 2013-C14.

Rubie’s, which is an affiliate of the tenant New York Costumes, bills itself as the the “largest costume designer, manufacturer, and distributor in the United States.”

The note holder said that, “By letter dated May 4, 2021, plaintiff, through its counsel, inter alia, notified Borrower and Guarantor of, inter alia, the occurrence and continuance of Events of Default based upon, inter alia, the Payment Default and the Tax Default, revoked Borrower’s license to collect the Rents and profits generated by the Property, and accelerated all sums due and owing under the Loan Documents.”

The court filings are the positions of one party and are not necessarily accurate or complete. The property owner has not filed response papers. Court filing LINK.

Direct link to Acris document. link