$670M pre-foreclosure filed at RXR’s 230 Park

Green Loan Services, the special servicer for the securitized trust known as Morgan Stanley Capital I Trust 2021-230P, Commercial Mortgage Pass-Through Certificates, Series 2021-230P, filed a pre-foreclosure action yesterday alleging the $670 million loan secured by RXR Realty’s 230 Park Avenue in the Grand Central neighborhood of Manhattan was in a maturity default. The case was filed in New York State Supreme Court in Manhattan.

RXR Realty, led by Scott Rechler, borrowed refinanced the building in November 2021 with the $670 million loan.

Case LINK

Court filings represent the position of one party and are not necessarily accurate or complete.

According to the complaint, the loan matured December 23, 2023, but the parties signed two forbearance agreements, but they both expired before RXR could refinance the property.

According th the complaint, “By written notice to Borrower and Guarantors dated October 7, 2024 (the “October 7, 2024 Notice”), Special Servicer notified Borrower and Guarantors that the Forbearance Expiration Date (as defined in the Second Forbearance Agreement) has occurred, and the Forbearance Period (as defined in the Second Forbearance Agreement) has expired and terminated. Further, in the October 7, 2024 Notice, Special Servicer notified Borrower that as a result of the occurrence and continuance of the Maturity Default, the entire Debt is and shall be immediately due and payable, and demanded that Borrower immediately pay to Special Servicer the entire amount of the Debt, including, without limitation, all late charges and all accrued and outstanding interest at the default rate under the Loan Documents, in the amount of $690,533,523.31 as of October 9, 2024, excluding legal fees of counsel.”

Crain’s reported on the pre-foreclosure action earlier today.

The property

The office building in Grand Central has 1,212,596 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 344 feet and is 200 feet deep with a total lot size of 69,153 square feet. The zoning is C5-3 which allows for up to 15 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The property is in the Individual Landmark. The city-designated market value for the property in 2022 is $473.3 million. The most recent loan totaled $670 million and was provided by Morgan Stanley on November 12, 2021.

Prior sales and revenue

This property was sold with 143 other properties for $33.1 million on February 28, 2020.

The 1,212,596-square-foot property generated revenue of $90.3 million or $74 per square foot, according to the most recent income and expense figures.

Development

For the tax lot building, it received its initial certificate of occupancy on July 7, 2016.

Violations and lawsuits

According to city public data, the property has received $4,885 in OATH penalties in the last year.

There were no lawsuits or bankruptcies filed against the property for the past 24 months.

The neighborhood

In Grand Central, The majority, or 83 percent of the 44.4 million square feet of commercial built space are office buildings, with hotel buildings next occupying 8 percent of the space. In sales, Grand Central has the 10th highest sale turnover among other neighborhoods in the city with $1.1 billion in sales volume in the last two years. For development, Grand Central is the 6th most active neighborhood among other neighborhoods. It had 5.8 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 19 commercial properties representing 1,410,317 square feet of the 2,118,510 square feet. The largest owner is 141 E 45th Llc, followed by Ken Aretsky and then Pi Capital Partners. There are no active new building construction projects on this tax block.

The owner

The PincusCo database currently indicates that Rxr Realty owned at least 22 commercial properties with 1,000 residential units in New York City with 9,625,887 square feet and a city-determined market value of $3.1 billion. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 89 percent of the 9,625,887 square feet of built space are office properties, with D3 properties next occupying 4 percent of the space. The bulk, or 83 percent of the built space, is in Manhattan, with Brooklyn next at 14 percent of the space.

The surrounding

Within a 400-foot radius of 87 East 45 Street, PincusCo identified one commercial real estate item of interests occurred over the past 24 months. It was a sale which JPMorgan Chase bought the zero-square-foot, 35-unit office building (O9) on 250 Park Avenue for $320.2 million from AEW Capital Management on August 21, 2024.

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