$66M pre-foreclosure filed at MJ Orbach office building in Flatiron District

Lender Blackstone Group through the entity SIG CRE 2023 Venture filed a $66 million pre-foreclosure action alleging a maturity default at the office building with the address 27-35 West 24th Street in the Flatiron District. The building owner is MJ Orbach Associates through the entity West 24-27 Realty LLC. Blackstone filed the case in State Supreme Court in Manhattan on February 11, 2025.
Court filings represent the position of one party and are not necessarily accurate or complete.
Case LINK

The alleged default was triggered by Blackstone’s refusal to extend the maturity date of the $66 million loan, citing several reasons. One was that an appraisal for the property valued it at $57 million, which was below the outstanding debt, and another was that the debt service coverage ratio was .59x, below the threshold of 1.20x.
Michael Orbach of MJ Orbach Associates bought the building on February 23, 2015 for $92.5 million. Later Orbach borrowed $66 million from Signature Bank on August 29, 2017.

In 2019, Michael Orbach of West 24-27 Realty LLC submitted a major alteration application for a renovation of the 94,075 square-foot commercial (COM) building at 27 West 24 Street in Flatiron District, Manhattan. The plan was filed with the New York City Department of Buildings on April 11, 2019 under job number 123734245. It called for the increase in size of the building from an 11-story building to a 12-story building. The project was described in the filing as: adding 12th floor, new partitions, extending stairs and installing new elevator for this floor. Replace and relocate existing bathrooms at 11th floor and 10th floor partial ceiling.

The property

The office building in Flatiron District has 94,075 square feet of built space and 4,641 square feet of additional air rights for a total buildable of 98,750 square feet according to a PincusCo analysis of city data. The parcel has frontage of 100 feet and is 98 feet deep with a total lot size of 9,875 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 $25.3 million.

Prior sales and revenue

This property was sold for $92.5 million on February 23, 2015.

The 94,075-square-foot property generated revenue of $6.7 million or $72 per square foot, according to the most recent income and expense figures.

Violations and lawsuits

According to city public data, the property has received $4,500 in OATH penalties in the last year.

The property was involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $66 million money judgment concerning a loan filed on September 4, 2024, by MJ Orbach Associates and Michael Orbach against Blackstone Group.

The neighborhood

In Flatiron District, The majority, or 71 percent of the 23.2 million square feet of commercial built space are office buildings, with elevator buildings next occupying 15 percent of the space. In sales, Flatiron District has near average sales volume among other neighborhoods with $535.6 million in sales volume in the last two years and is the 22nd highest in Manhattan. For development, Flatiron District has near average amount of major developments among other neighborhoods and is the 11th highest in Manhattan. It had 3 million square feet of commercial and multi-family construction under development in the last two years, which represents 13 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 10 of the 20 commercial properties representing 804,635 square feet of the 1,382,183 square feet. The largest owner is Adams & Company, followed by Edison Properties and then Hong Bae Park. There are no active new building construction projects on this tax block.

The surrounding

Within a 400-foot radius of 35 West 24 Street, PincusCo identified 10 commercial real estate items of interests occurred over the past 24 months. Of those 10 items, eight were sales above $5 million totaling $487.9 million. The most recent of the eight was Allied Realty & Development which bought the 14,217-square-foot, 28-unit rental (D1) on 28 West 26th Street for $9.8 million from Gould Investors on February 5, 2025. Of those 10 items, two were loans above $5 million totaling $54.8 million. The most recent of the two was Allied Realty & Development in which borrowed $6.8 million from Citizens Bank secured by the 14,217-square-foot, 28-unit rental (D1) on 28 West 26th Street on February 5, 2025.

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