Aareal, PCCP file $149M pre-foreclosure at Meringoff’s 462 Broadway in SoHo

German lender Aareal Capital and California-based PCCP filed a $149.3 million pre-foreclosure action at Stephen Meringoff and Jay Shidler’s 462 Broadway in SoHo, which is managed by an affiliate of Himmel + Meringoff Properties. The lenders allege the loan is in default and are seeking a foreclosure sale of the property.

Court cases reflect the position of one party and are not necessarily accurate or complete. The lenders and borrowers signed a pre-negotiation agreement in June 2023, which sometimes can indicate the parties will renegotiate the loan.

Himmel + Meringoff Properties borrowed $135 million in June 2016 from Aareal Capital. Two years later, the Commercial Observer reported that the landlords had signed a 10-year lease with Israeli venture capital firm Jerusalem Venture Partners.

In February 2020, Jerusalem Venture Partners announced it had opened an office for the International Cyber Center.

The following year, the $135 million loan was refinanced, with Aareal Capital selling a $35 million piece to PCCP but retaining the rest. The Meringoff and Shidler team borrowed another $14.3 million in the form of a building loan in May 2022 from Aareal and PCCP.

In June 2023 that parties including guarantors Meringoff and Shidler signed a pre-negotiation agreement.

According to the complaint, following a technical default in May 2023, “Borrowers defaulted on the Loans by failing to pay the interest due and payable on the Loans on each of the payment dates of June 12, 2023, July 10, 2023, August 10, 2023 and September 11, 2023.” On September 21, 2023, the lenders accelerated the loan, but it remains unpaid. https://hmprop.com/portfolio/462-broadway/

The property

The office building in SoHo has 141,050 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 100 feet and is 200 feet deep with a total lot size of 20,149 square feet. The property is in the SoHo-Cast Iron Historic District. The city-designated market value for the property in 2022 is $42.9 million.

Violations and lawsuits

According to city public data, the property has received two DOB violations and $4,205 in OATH penalties in the last year.

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

The block

On this tax block, PincusCo has identified the owners of eight of the 20 commercial properties representing 280,346 square feet of the 387,586 square feet. The largest owner is 18 Main, followed by Himmel + Meringoff Properties and then KPG Funds. There are no active new building construction projects on this tax block.

The surrounding

Within a 400-foot radius of 464 Broadway, PincusCo identified 18 commercial real estate items of interests occurred over the past 24 months. Of those 18 items, nine were sales above $5 million totaling $177.6 million. The most recent of the nine was Spear Street Capital which bought the 30,034-square-foot, five-unit office building (O5) on 32 Howard Street for $48.1 million from Intercontinental Real Estate and KPG Funds on October 12, 2023. Of those 18 items, nine were loans above $5 million totaling $258.4 million. The most recent of the nine was 18 Main in which borrowed $9.2 million from Balbec Capital secured by the 8,803-square-foot, one-unit hotel (H3) on 431 Broome Street on August 25, 2023.

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