$27.5M pre-foreclosure at Argentine family’s Garment District building, second for them since 2021

The special servicer for bondholders of a securitized loan, GS Mortgage Securities Corporation II Commercial Mortgage Pass-Through Certificates, Series 2017-GS5, filed a pre-foreclosure action against the Argentinian owners of 20 West 37th Street, a 69,701-square-foot office building in the Garment District, Manhattan. The building is owned by affiliates of the Neuss Group, which manages assets of the Neuss family of Argentina. The lender representative filed the action on July 16, 2024, in Manhattan State Supreme Court.
Case LINK
This is the second office building that the Neuss family owns in Manhattan to be the subject of a pre-foreclosure. The lender for the other building, 33 West 46th Street, filed to foreclose on a $19.5 million loan in September 2021. The court set a foreclosure auction date for that property on July 17, 2024, though it was not clear what the result of the auction was.

As for the 20 West 37th Street building, the Commercial Observer reported in March 2024 that the loan was placed into special servicing. Prior to that Crain’s reported the building appeared mostly vacant as of September 2023.

The Neuss family was convulsed by a femicide in 2020, in which one of the leaders of the family, Jorge Justo Neuss, killed his wife and then killed himself at a country club outside of Buenos Aires. Jorge Justo Neuss was a guarantor for the loan on 33 West 46th Street, according to the complaint.

The office building in Garment District has 69,701 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 63 feet and is 98 feet deep with a total lot size of 6,314 square feet. The zoning is M1-6 which allows for up to 10 times floor area ratio (FAR) for manufacturing. The city-designated market value for the property in 2022 is $14.4 million.

Prior sales and revenue

This property was purchased for $25.5 million on January 31, 2006.

The 69,701-square-foot property generated revenue of $2.9 million or $42 per square foot, according to the most recent income and expense figures.

Violations and lawsuits

According to city public data, the property has received $1,780 in ECB penalties and $17,570 in OATH penalties in the last year.

The neighborhood

In Garment District, The majority, or 69 percent of the 52.3 million square feet of commercial built space are office buildings, with hotel buildings next occupying 13 percent of the space. In sales, Garment District has near average sales volume among other neighborhoods with $542.4 million in sales volume in the last two years and is the 16th highest in Manhattan. For development, Garment District is the 4th most active neighborhood among other neighborhoods. It had 7.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 14 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of eight of the 29 commercial properties representing 824,024 square feet of the 1,676,094 square feet. The largest owner is Chandrakant Patel, followed by Empire Management and then Jack Ezon. On the tax block, there was one new building construction project filed totaling 46,824 square feet. It is a 143-unit, 46,824 square-foot hotel/dormitory/shelter (R-1) building submitted by Richard Fung with plans filed December 4, 2014 and permitted March 9, 2017.

The surrounding

Within a 400-foot radius of 24 West 37 Street, PincusCo identified 13 commercial real estate items of interests occurred over the past 24 months. Of those 13 items, four were sales above $5 million totaling $60.6 million. The most recent of the four was Hilson Management and Jeremy Schwalbe which bought the 133,544-square-foot, 52-unit office building (O6) on 386 5th Avenue for $25.1 million from KMF Holding on June 27, 2024. Of those 13 items, nine were loans above $5 million totaling $373.6 million. The most recent of the nine was Thomson Lee and Angelina Lee in which borrowed $15.9 million from JPMorgan Chase secured by the 54,725-square-foot, 62-unit office building (O6) on 40 West 37th Street on March 26, 2024.

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