$18.3M bankruptcy filed to block Fannie Mae-led foreclosure

Four months after the government-sponsored entity Fannie Mae filed an $18.3 million pre-foreclosure action against the owner of the 154-unit rental building at 400 Herkimer Street in Bedford Stuyvesant, Brooklyn, the owner placed the property in bankruptcy protection.

Property owner Amarbin Ahmed filed the chapter 11 petition October 31, 2024 in the Eastern District of New York U.S. Bankruptcy Court, two days after the court appointed a receiver for the property, on October 30.

Case 1-24-44566-jmm LINK

Fannie Mae, under its formal name Federal National Mortgage Association, filed the pre-foreclosure action against Ahmed’s AZ 400 Herkimer LLC, in U.S. District Court in Brooklyn on June 27, 2024, with the index number 1:24-cv-04569-EK-LKE. On October 30, the court appointed Ian Lagowitz as receiver for the property.

Fannie Mae in it’s June complaint, alleged the loan fell into a payment default less than a year after Ahmed bought the property.

Amarbin Ahmed purchased the six-story, 145,336-square-foot elevator building from Dilruba Hussain and Delwar Hussain for $21.1 million on May 25, 2023, borrowing $18.3 million originated by Greystone & Co. and assigned to Fannie Mae.

According to a demand letter dated May 20, 2024, sent by Fannie Mae’s attorneys, “multiple defaults have occurred under the terms of the Note and other Loan Documents (as such terms are defined herein) by virtue of, inter alia, (1) Borrower’s failure to make monthly payments of certain amounts due and outstanding under the Loan Documents starting in February 2024 and continuing to the present; (2) Borrower’s failure to furnish annual and quarterly financial information, including rent rolls, by the dates required under the Loan Documents; and (3) Borrower’s granting of a junior lien, encumbrance, and security interest in the form of a junior mortgage.”

Violations and lawsuits

According to city public data, the property has received one DOB violation, $655 in ECB penalties, 200 housing violations, $1,005 in OATH penalties, and four housing litigations in the last year.

The property was involved in one lawsuit and no prior bankruptcies over the past two years. The suit was a $18.3 million commercial foreclosure concerning a loan filed on June 27, 2024, by Fannie Mae against Amarbin Ahmed.

The neighborhood

In Bedford Stuyvesant, The bulk, or 35 percent of the 54.8 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 29 percent of the space. In sales, Bedford Stuyvesant has the 8th highest sale turnover among other neighborhoods in the city with $1.1 billion in sales volume in the last two years. For development, Bedford Stuyvesant has near average amount of major developments among other neighborhoods and is the 5th highest in Brooklyn. It had 2.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 5 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 13 of the 24 commercial properties representing 228,668 square feet of the 290,881 square feet. The largest owner is Akleema Valme, followed by Alchemy Ventures and then Amarbin Ahmed. On the tax block, there were two new building construction projects totaling 17,787 square feet. The largest is a 10-unit, 11,197 square-foot residential (R-2) building submitted by Rona Reodica with plans filed May 7, 2020 and permitted August 22, 2023. The second largest is a eight-unit, 6,590 square-foot residential (R-2) building submitted by M1 Development and filed by Rafael Manor with plans filed December 24, 2014 and permitted November 17, 2016.

The owner

The PincusCo database currently indicates that Amarbin Ahmed owned at least one commercial property with 154 residential units in New York City with 145,336 square feet and a city-determined market value of $5.2 million. (Market value is typically about 50% of actual value.) The portfolio has $27.5 million in debt, borrowed from Greystone & Co. and UC Funds. The portfolio consists of at least a single elevator property. It is located in Brooklyn.

The owners according to the Department of Housing Preservation and Development includes Delwar Hussain, head officer and Dilruba Hussain, officer. The business entity is Surat Realty.

The surrounding

Within a 400-foot radius of 408 Herkimer Street, PincusCo identified four commercial real estate items of interests occurred over the past 24 months. Of those four items, two were in new building development. There were two new building permits. The most recent of these two items was a permit on August 22, 2023 for a 11,197-square-foot residential (R-2) building with 10 residential units at 423 Herkimer Street. Of those four items, two were loans above $5 million totaling $38.2 million. The most recent of the two was David Banda in which borrowed $9.2 million from Starwood Mortgage Capital secured by the 2,449-square-foot, 21-unit rental (D3) on 35 Kingston Avenue on January 26, 2024.

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