$224M pre-foreclosure filed at RFR Holding Midtown West office building

The administrative agent and the servicer for the bondholders of the securitized trust Series 2020-522F filed a $224 million pre-foreclosure at RFR Holding’s nine office condominium units that make up the office portion of the retail and office building at 522 Fifth Avenue in Midtown West, Manhattan.

The complaint alleges the $224 million originally provided by Credit Suisse’s Column Financial on August 27, 2020, is in a maturity default, because it was not repaid on March 9, 2024. RFR Holding, led by Aby Rosen and Michael Fuchs, bought the office portion of the building in 2020 for $350 million.

Court LINK

Court filings represent the position of one party and are not necessarily accurate or complete.

The complaint alleges other financial defaults in addition to the maturity default.

RFR Holding has faced recent challenges such as this pre-foreclosure and others even as it has moved forward with acquisitions over the last several years.

The property is composed of, “condominium units…  which units comprise the office portion of a 23-story, 512,476-square-foot office tower located at 522 Fifth Avenue, between West 43rd and 44th Streets… On December 28, 2023, Servicer further notified Borrower that Servicer [KeyBank] had made a protective advance in the amount of $1,678,962.27 (the “Protective Advance”) in order to make certain property tax payments on behalf of Borrower with respect to the Property… On January 19, 2024, Lender issued an Event of Default notice to Borrower regarding the True-Up Payment… On January 22, 2024, Servicer notified Defendants that Borrower had failed to cause the Interest Rate Cap Agreement payments to be deposited into the Cash Management Account from the period of January 2023 through January 2024, demanded such payment in the amount of $1,871,866.06… On March 15, 2024, Servicer notified Defendants that the matured indebtedness on the Promissory Notes had not been paid in full…”

The property

The condo building in Midtown West has 431,000 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 115 feet and is 250 feet deep with a total lot size of 27,025 square feet. The lot is irregular. The zoning is C5-3 which allows for up to 15 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing.

Violations and lawsuits

According to city public data, the property has received $3,375 in OATH penalties in the last year.

There were no lawsuits or bankruptcies filed against the property for the past 24 months.

The neighborhood

In Midtown West, The majority, or 75 percent of the 75.9 million square feet of commercial built space are office buildings, with hotel buildings next occupying 14 percent of the space. In sales, Midtown West has the 3rd highest sale turnover among other neighborhoods in the city with $2.6 billion in sales volume in the last two years. For development, Midtown West is the most active neighborhood among other neighborhoods. It had 27.9 million square feet of commercial and multi-family construction under development in the last two years, which represents 37 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of four of the 10 commercial properties representing 455,504 square feet of the 1,234,508 square feet. Other large owners include APF Properties, followed by MCR and then Princeton Club. On the tax block, there was one new building construction project filed totaling 523,188 square feet. It is a 98-unit, 523,188 square-foot business (B) building submitted by Rabina and filed by Ian Klein with plans filed January 4, 2021 and permitted September 1, 2022.

The surrounding

Within a 400-foot radius of 528 5 Avenue, PincusCo identified eight commercial real estate items of interests occurred over the past 24 months. Of those eight items, one was in new building development. It was a new building permit issued on September 1, 2022 for a 452,134-square-foot business (B) building with 98 residential units at 520 Fifth Avenue. Of those eight items, three were sales above $5 million totaling $201 million. The most recent of the three was 15 West 43rd Street LLC which bought the 63,860-square-foot, four-unit hotel (H5) on 15 West 43rd Street for $43.4 million from Princeton Club on December 1, 2023. Of those eight items, four were loans above $5 million totaling $466.7 million. The most recent of the four was Wharton Properties, Aurora Capital Associates, and ACHS Management in which borrowed $10 million from NongHyup Bank secured by the 125,632-square-foot, two-unit office building (O6) on 511 5th Avenue on April 18, 2024.

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