$750M pre-foreclosure filed at Maefield’s 20 Times Square

UPDATED 6:10 a.m. October 19, 2023: A securitized loan trust filed to foreclose on a $750 million loan secured by Maefield Development’s fee interest in 20 Times Square, also known as 701 Seventh Avenue in Times Square, Manhattan. This is the second large pre-foreclosure action at the hotel and retail building. In the first, Natixis filed to foreclose on a $650 million loan secured by Maefield Development’s leasehold interest in the same building.

In 2018, Mark Siffin’s Maefield Development bought out its partners at 701 Seventh Avenue, also known as 20 Times Square, in a $1.5 billion deal, with the asset divided into a fee position and a leasehold position.

In 2019, Marriott International opened the 452-room Times Square Edition Hotel but the hotel temporarily closed in August 2020 as the pandemic put pressure on hotels. It reopened in 2021. The hotel is biggest piece of the building and the Marriott contract will survive any foreclosure action, the New York Post reported in 2021.

The 42-story hotel building in Times Square has 369,864 square feet of built space according to a PincusCo analysis of city data.

To finance the buyout, the Maefield Development leasehold position, 20TSQ Lessee LLC, borrowed $650 million from Natixis. At the same time, Maefield’s fee position, 20TSQ Groundco LLC, borrowed $750 million from Natixis, and that loan was sold off as into a securitized trust, 20 Times Square Trust 2018-20TS, Series 2018-20TS.

Natixis in December 2019 filed (850272/2019) to foreclose on the $650 million loan. Natixis took control of the leasehold interest through a January 26, 2022, foreclosure auction as the credit bidder.

According to the new complaint, “Plaintiff brings this foreclosure action against the owner of the 42-story building located at 20 Times Square and the guarantor of a mortgage loan, in connection with a $750,000,000 mortgage loan provided to the owner in 2018 to fund the purchase of the property.

“On May 5, 2023, the entire balance of the loan became due and owing…In addition to defaulting on its obligation to repay the entire balance of the loan at maturity, the owner has independently defaulted on other loan obligations by failing to satisfy other key loan covenants, such as keeping the property free of non-permitted encumbrances, providing prompt notice of any litigation affecting the property, and refraining from making any materially false or misleading representations in connection with the loan.”

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

In November 2022, the Commercial Observer reported the loan had been sent to special servicing.

The parcel has frontage of 160 feet and is 100 feet deep with a total lot size of 16,066 square feet. The zoning is C6-7T which allows for up to 14 times floor area ratio (FAR) for commercial. The city-designated market value for the property in 2022 is $116.2 million.

Mark Siffin is identified personally as a guarantor.

Correction: An earlier version of this post implied Maefield Development still owned the leasehold interest as of August 2023, but it in fact lost it in January 2022.

Direct link to the property’s ACRIS page.