$55M pre-foreclosure filed at Thor’s East Harlem commercial, Sitt sought special servicing
125 East 125th Street and 126 East 126th Street (Credit - Google)
The special servicer for a loan with an original principal of $55 million filed a pre-foreclosure action on Friday alleging an affiliate of Joseph Sitt’s Thor Equities defaulted on the debt secured by office and retail buildings 135 East 125th Street and 126 East 125th Street in East Harlem, Manhattan. Special servicer CWCapital Asset Management, on behalf of bondholders of Series 2017-C5, filed the action in New York State Supreme Court in Manhattan on February 28, 2025.
Three months ago, Thor Equities asked for the loan to be transferred to special servicing so that the parties can hold “structured conversations.” Often securitized loan servicers cannot restructure loans, but special servicers can. In some cases, a pre-foreclosure action must be filed in order to initiate restructuring.
Case LINK
Thor Equities, through the entities Thor Gateway I & II Owner, LLC, bought the properties in 2016 for $75.83 million. In 2017, Thor Equities refinanced the original debt with a $55 million loan from Deutsche Bank, which was then packaged it into the securitized loan.
PincusCo estimates Thor Equities has a New York City portfolio worth $580 million, composed of 38 properties. It has lost several assets in recent years in foreclosure, as well as sold properties and also purchased real estate in the city.
Thor Equities sent a letter to the servicer in November 2024 after failing to make loan payments.
The letter says, in part, “As you are aware, the Loan is delinquent in that the Borrower failed to make the monthly payments for October and November, 2024, as income for the Property is insufficient to cover such monthly payments. The New York City retail and office market, much like the rest of the country, has faced challenges since 2020. These market conditions have slowed the Borrower’s ability to find tenants. The combination of the vacancies and slowed leasing environment warrants structured conversations surrounding the appropriate course of action to be taken with respect to the Loan. In light of the foregoing, the Borrower respectfully requests that the Loan be transferred to the Special Servicer.”
In December, The Real Deal reported the loan had been declared in default.
According to the complaint, “Borrower failed to timely pay the full amount due under the Loan Documents on October 6, 2024, and on each Monthly Payment Date thereafter through and including at least February 6, 2025… In a letter dated November 20, 2024, addressed to the master servicer of the Loan, Borrower acknowledged that it “failed to make the monthly payments for October and November, 2024,” and requested that servicing for the Loan be transferred to the special servicer… on or around February 13, 2025… Plaintiff sent a Notice of Event of Default and Acceleration to Borrower… the unpaid balance of Borrower’s obligations under the Loan Documents, determined as of January 6, 2025, totals at least $55,497,543.54, and includes (i) the unpaid principal amount of $50,899,518.49, [and other fees and charges].”
Recent Thor Equities headlines in PincusCo:
Berggruen Holdings, Firebird pay $25M to Thor for 9 rentals in Boerum Hill (January 06, 2025)
• Terreno Realty pays $156.2M to Thor Equities for industrial in Red Hook (December 19, 2024)
• Maverick acquires in auction Thor’s Meatpacking retail with $27M judgment (November 17, 2024)
• Thor loses two-story SoHo retail to lender in $8M foreclosure auction (August 19, 2024)
• Thor, ASB Capital sell FiDi retail for $4.95M to Torkian Group, bought for $31M (July 23, 2024)
• Thor Equities loses retail in NoHo to lender, following $8.5M foreclosure (July 16, 2024)
• Thor’s 440 Broadway in SoHo set for $10.7M foreclosure auction in July (June 04, 2024)
• TZ Capital pays $180M to Thor, CenterSquare for retail unit in Lenox Hill (May 29, 2024)
• Thor’s Scribner building with $105M loan moves closer to foreclosure auction (April 24, 2024)
The mixed-use building at 135 East 125th Street in East Harlem has 43,630 square feet of built space and 40,006 square feet of additional air rights for a total buildable of 83,623 square feet according to a PincusCo analysis of city data. The parcel has frontage of 115 feet and is 99 feet deep with a total lot size of 13,891 square feet. The lot is irregular. The zoning is C4-4D which allows for up to 3.4 times floor area ratio (FAR) for commercial and up to 6.02 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $11.4 million.
Direct link to the property’s ACRIS page
The office building at 126 East 126th Street in East Harlem has 58,948 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 115 feet and is 99 feet deep with a total lot size of 9,091 square feet. The lot is irregular. The zoning is C4-4D which allows for up to 3.4 times floor area ratio (FAR) for commercial and up to 6.02 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $9.7 million.
Direct link to the property’s ACRIS page