$32.8M pre-foreclosure filed at FiDi dev site

UPDATED: Bank Hapoalim alleged in a pre-foreclosure filing made yesterday that the Hidary family’s Hidrock Properties did not repay a $32.8 million loan secured by the vacant parcels at 140 Fulton Street and 142 Fulton Street by the March 2022 due date, and so the the lender declared the loan in default.

The development site value is likely impacted by the loss of 421a and the weakness of the hotel market, which were both stronger at the time the property was purchased.

Court filings are the positions of one party and are not necessarily accurate or complete. Insiders say that in some instances, banks need to file a pre-foreclosure in order to make certain changes to a loan. However, as travelers have started to come back to New York, developments sites such as this are beginning to see a recovery of value.
Hidrock did not immediately respond to a request for comment.

Hidrock bought the two parcels in 2018 for a total of $41 million from Raymond Gindi and The Real Deal reported the buyer was likely to build a residential building, with the approximately 84,200 square feet of development rights. The complaint alleges members of the Hidary family signed a guaranty totaling $10 million.

According to the complaint, “On or about October 16, 2018, Plaintiff agreed to make a $32.8 million loan to Borrower (the “Loan”). The Borrower’s obligation to repay the loan was evidenced by a Mortgage Loan Note, dated as of October 17, 2018 (the “Note”, attached hereto as Exhibit A), and secured by a mortgage on 140-142 Fulton Street, New York, New York…”

“Borrower failed to make the required payment of principal, interest, and fees by the Note’s March 31, 2022 maturity date. Plaintiff notified Borrower of its default by written notice dated May 19, 2022. Borrower has not cured its default or repaid the loan, and Guarantors have not made any payment under the Guaranty…”

“To date, Borrower owes Plaintiff in excess of $35.2 million, which includes $32,500,193.24 of the principal balance outstanding under the Loan, together with accrued interest, default interest, late fees, and an extension fee. In addition to the above-stated amount, Borrower owes Plaintiff any costs and expenses, including reasonable attorneys’ fees and costs, and all other amounts due and owing under the Loan Documents, in an amount to be determined at trial. 5. Guarantors, meanwhile, owe Plaintiff up to $10,000,000 of the outstanding principal or unpaid debt service balance outstanding under the Loan.” Douglas Rutley, National Head of Commercial Real Estate for Bank Hapoalim, signed on behalf of the bank in the court filing. LINK