AIG files $285.5M pre-foreclosure at Chetrit, Moinian, Minskoff Garment District building

Affiliates of lender AIG filed a pre-foreclosure action yesterday in New York State Supreme Court in Manhattan, alleging a leasehold mortgage secured by the 606,078-square-foot Garment District office building at 500-512 Seventh Avenue, owned by the Chetrit Group, Moinian Group and Edward J. Minskoff Equities, was in a payment default with $285.5 million outstanding.
AIG provided a $375 million loan to the joint venture in 2018. At the time WeWork was the anchor for the building. Solil Management, which manages the assets of the estate of Sol Goldman, owns the fee. The original ground lease was signed in 1957. Solil Management is not involved in this litigation.

Case LINK
Court filings represent the position of one party and are not necessarily accurate or complete. The borrowers have not yet responded in court filings. Representatives for the companies have not immediately responded to a request for comment. This is the second large pre-foreclosure this week. A day earlier, LNR Partners as special servicer filed a $310 million pre-foreclosure at Moinian Group’s 545 Fifth Avenue, as PincusCo first reported.

Older generation office building values have declined sharply over the past several years, even as modern structures continue to be developed.

Despite the challenges these owners may be facing on this property, some are also forging ahead with new projects. For example, Edward J. Minskoff Equities in June signed a ground lease for a likely development in NoHo.

According to the complaint, “Borrower has defaulted on the Loan (as defined herein) including, but not limited to, due to its failure to make required payments under the Loan Documents when due (each an “Event of Default,” and, collectively, the “Events of Default”), which Events of Default have not been cured despite numerous written notices to Borrower, as well as to Guarantors (as defined herein). Further, multiple Bad Acts (as defined herein) under the Loan Documents have occurred, which have triggered recourse against Guarantors, jointly and severally…” Notice of acceleration: “entire outstanding indebtedness due under the Loan Documents in the principal sum of $285,530,410.84.”

The Chetrit Group in partnership with Larry Gluck, bought the leasehold that controls the building in 1999 from the Malkin family.

The property

The office building in Garment District has 606,078 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 74 feet and is 275 feet deep with a total lot size of 36,260 square feet. The lot is irregular. 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 $156.7 million.

Violations and lawsuits

According to city public data, the property has received one DOB violation and $6,785 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 Garment District, The majority, or 69 percent of the 52.3 million square feet of commercial built space are office buildings, with hotel buildings next occupying 13 percent of the space. In sales, Garment District has the 10th highest sale turnover among other neighborhoods in the city with $1.2 billion in sales volume in the last two years. For development, Garment District is the 6th most active neighborhood among other neighborhoods. It had 9.4 million square feet of commercial and multi-family construction under development in the last two years, which represents 18 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of nine of the 17 commercial properties representing 1,460,067 square feet of the 2,750,711 square feet. The largest owner is Hakimian Organization, followed by ID Real Estate Partners and then Joseph Nazar. There are no active new building construction projects on this tax block.

The owner

The PincusCo database currently indicates that Solil Management owned at least 256 commercial properties with 4,301 residential units in New York City with 8,866,618 square feet and a city-determined market value of $2.5 billion. (Market value is typically about 50% of actual value.) The portfolio has $18 million in debt, borrowed from State Farm Realty Mortgage. Within the portfolio, the bulk, or 36 percent of the 8,866,618 square feet of built space are elevator properties, with office properties next occupying 24 percent of the space. The bulk, or 70 percent of the built space, is in Manhattan, with Queens next at 15 percent of the space.

The surrounding

Within a 400-foot radius of 506 7 Avenue, PincusCo identified five commercial real estate items of interests occurred over the past 24 months. One of those five items was a sale which Cayre Equities and A&H Acquisitions bought the 130,000-square-foot, 15-unit office building (O9) on 229 West 36th Street for $19.2 million from Brickman and Investcorp on June 3, 2025. Of those five items, four were loans above $5 million totaling $82.9 million. The most recent of the four was ID Real Estate Partners in which borrowed $5.3 million from Fidelity Bank secured by the 47,661-square-foot, 15-unit office building (O6) on 242 West 38th Street on July 3, 2025.

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