$45M pre-foreclosure filed at Watermark’s highly litigated Sunset Park dev site
6208 8th Avenue (Credit - Nataliya Donskoy architect via DOB)
A Blackstone Group affiliate filed a pre-foreclosure action yesterday in Brooklyn alleging a $45.3 million loan Signature Bank gave in January 2023 to the owners of 6208 8th Avenue in Sunset Park, Brooklyn, including Watermark Capital Group, is now in default.
There is currently a job application B00754062 for a 497-unit, 646,443-square-foot mixed-use tower at the property with the addresses 6128 8th Avenue and 6202 8th Avenue.
Case 521254/2024 LINK
The case adds to the large amount of litigation at the site now, as well as prior actions.
Court filings represent the position of one party and are not necessarily accurate or complete.
In this case, the lender, through the entity SIG CRE 2023 Venture LLC, alleges the borrowers did not repay the loan by the maturity date. “The Loan matured on January 10, 2024, and Borrowers defaulted on their obligations under the Consolidated Note by failing to remit to Lender all amounts due and owing under the Loan Documents (the “Maturity Default”).” In addition they allege the borrowers did not make the December 2023 loan payment, and claim there are four notices of pendency, which are each a violation of the loan terms, the complaint says.
Brooklyn investors Wolfe Landau and David Tabak of Watermark Capital Group and Marvin Azrak of Maguire Capital Group through the entity 62-08 Realty LLC acquired control of the large development site after more than a year of partial interest buyouts, other investor buyers and legal wrangling. Maguire Capital Group is no longer part of the ownership. Months after Signature Bank provided the loan, it was declared insolvent and in December 2023, Blackstone Group bought a portion of the bank’s loan portfolio, including this property.
The project, which is adjacent to an N subway stop, requires a Uniform Land Use Review Process (ULURP) review to achieve the full development size.
The total cost so far to acquire the property has been about $85 million.
The parcel has been involved in at least five lawsuits including from purported lenders to prior owners, over the past two years, and PincusCo reported on an early Watermark purchase of an interest in this property for $11.5 million, in 2021 from Wing Fung Chau.
In the most recent lawsuit, Watermark Capital Group through the entity 62-08 Realty LLC, sued the former owner of a large development parcel at 6128 8th Avenue in Sunset Park, Brooklyn, who remained in control under a master lease, because a neighbor had not been included in a construction license and access agreement the developers need to move ahead. The plaintiffs are seeking $10 million or more if they can’t get the required approvals, but what they really want is for the former owner to perform according to their agreements, the complaint says, not any monetary compensation. The plaintiffs filed the case June 11, 2024 in New York State Supreme Court in Manhattan.