All Year puts large Bushwick rental in bankruptcy

By Adam Pincus

An affiliate of All Year Management’s 468-unit Bushwick rental the Denizen X, was placed in bankruptcy protection yesterday. It faced a uniform commercial code (UCC) foreclosure auction on a $65 million mezzanine loan this month, following a prior postponement.

All Year developed 123 Melrose Street, and opened it in 2019, according to the initial temporary certificate of occupancy. The building is part of the former Reingold Brewery site. All Year is also developing an adjacent property, Denizen Y, which is not part of this action.

All Year placed the entity Evergreens Gardens Mezz LLC in Chapter 11 protection. The entity that controls the property is Evergreen Gardens I LLC. A document outlining the the filing is here.

The filing claims between $50 million and $100 million in assets and the same in liabilities.

Mack Real Estate provided a $65 million mezzanine loan for the development of the Denizen, and that mezz loan is the focus of this bankruptcy. Mack scheduled a UCC foreclosure of the mezzanine position, which in turn controls the property, for February 5, 2021, which was postponed for two weeks and was halted by this action.

All Year, as PincusCo first reported, filed a state court suit on February 4 to halt the initial UCC auction.

According to the bankruptcy filing, Mack “determined not to further extend or postpone the UCC sale. This refusal precipitated commencement of the Chapter 11 Case on an emergency basis to safeguard the value of the Debtor’s interest in the valuable Denizen properties and allow All Year to continue its negotiations.

“As of the Petition Date, the Debtor owed approximately $73 million – including principal, accrued interest, default interest and a forbearance fee – in outstanding obligations under the Mezzanine Loan.”

In a filing on the Tel Aviv Stock Exchange, Madison Capital and Meadow Partners who are vying to buy out bondholders, reported that they were “aware that the Company has entered or may enter into an agreement with Mack Credit Strategies (“Mack”) for a sale of Denizen I (Series E collateral) and Denizen II (JP Morgan/Mack collateral) via a broadly marketed process.”

The property has a first lien mortgage held by lender JPMorgan Chase Bank with a $170 million original principal value. The Commercial Observer reported in December that loan reported to be in technical default.