Bank files $13M pre-foreclosure at 6-unit High Line project

Lender Valley National Bank filed a $13 million pre-foreclosure case in New York State Supreme Court in Manhattan yesterday, alleging a loan Bank Leumi provided with an original principal of $13 million and secured by a six-unit new construction condominium project at 534 West 29th Street, was in a maturity default.
The developer of the project is the Israel-based LENY Group, led by Rudy Gabsi, which owns the parcel through the entity W29 534 Highline Owners LLC. The New York State Attorney General accepted the offering plan, but it was never declared effective, no condo declaration was recorded with the city’s Acris and and no sales have been recorded.
Court filings represent the position on one party and are not necessarily accurate or complete.

Case LINK

Earlier this month, the LENY Group placed a 40-unit rental in Williamsburg in bankruptcy protection.

According to the complaint, “Borrower failed, upon the Maturity Date, July 9, 2022, to pay all outstanding amounts due… By letter dated March 6, 2024 (the “Building Loan Demand Notice”), VNB notified Borrower and Guarantors of Borrower’s event of default… As a result of Borrower’s Default under the Loan Documents, Borrowers are indebted to VNB in the aggregate principal amount of $12,969,252…”

The new construction elevator building with six residential units in Chelsea has 13,427 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 25 feet and is 98 feet deep with a total lot size of 2,468 square feet. The zoning is C6-3 which allows for up to 6 times floor area ratio (FAR) for commercial and up to 7.52 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $4.6 million.

On the tax lot, the most recent condominium plan was filed by W29 534 Highline Owners LLC to create 6 residential units in a building at 534 West 29th Street in Chelsea, Manhattan, called No. 29 Condominium that has a $31.4 million sellout, according to an June 5, 2018 submission to the New York State Attorney General. The principals of the sponsor, W29 534 Highline Owners LLC, included Rudy Gabsi.

LENY Group through the entity W29 534 Highline Owners, LLC submitted a new building construction project for a six-unit, 12,339 square-foot residential (R-2) building at 534 West 29th Street. The plan was filed on July 19, 2013 and was permitted on November 18, 2016. It calls for the construction of a 124-foot tall, nine-story building and was filed with the New York City Department of Buildings under job number 121332673.

The block

On this tax block, PincusCo has identified the owners of 10 of the 13 commercial properties representing 791,078 square feet of the 1,088,861 square feet. The largest owner is Anastasios Tzezailidis, followed by Eight Points Asset Management and then Nazar Khan. On the tax block, there were three new building construction projects totaling 377,249 square feet. The largest is a 372-unit, 309,463 square-foot residential (R-2) building submitted by Lalezarian Properties and filed by David Sani with plans filed February 17, 2012 and permitted January 29, 2015. The second largest is a 19-unit, 55,447 square-foot residential (R-2) building submitted by Tamarkin Co. and filed by Cary Tamarkin with plans filed February 25, 2015 and permitted August 9, 2016.

The surrounding

Within a 400-foot radius of 534 West 29 Street, PincusCo identified five commercial real estate items of interests occurred over the past 24 months. Of those five items, three were sales above $5 million totaling $50.2 million. The most recent of the three was Silvera Properties which bought the 31,106-square-foot, one-unit mixed-use building (K4) on 533 West 27th Street for $24.5 million from Extell Development on June 13, 2023. Of those five items, two were loans above $5 million totaling $28.5 million. The most recent of the two was Kamran Hakim in which borrowed $22 million from Webster Bank secured by the 34,345-square-foot, 31-unit rental (D8) on 537 West 27th Street and one other property on February 16, 2024.

Direct link to the property’s ACRIS page.