Blackstone files $21M pre-foreclosure at Little Italy boutique office
243 Canal Street (Credit - Google)
Blackstone Group filed a $21 million pre-foreclosure action yesterday in New York State Supreme Court in Manhattan alleging a loan secured by Stellar Management and City Urban Realty’s 21,700-square-foot office building at 243 Canal Street between Lafayette Street and Centre Street on the border of Little Italy and Chinatown in Manhattan, was in a maturity loan default.
Court filings represent the position of one party and are not necessarily accurate or complete. Stellar and City Urban Realty have not yet responded in court filings.
PincusCo data shows Stellar Management is one of the largest property owners in the city with a portfolio worth approximately $5.6 billion in multifamily and office buildings.
Commercial property owners of all sizes are being hit with maturity loan defaults, as the value of some classes of investment properties have declined, making it more difficult to refinance assets.
Case LINK
Recent City Urban Realty activity:
• Acadia Realty Trust pays $21M to City Urban Realty for retail in Williamsburg (April 21, 2025)
• City Urban Realty pays $40M to Ohebshaloms for 88-unit rental in Lincoln Square (March 07, 2025)
The late real estate owner and developer Larry Gluck’s Stellar Management in partnership with Michael Alvandi’s City Urban Realty, through the entity Canal Street Ventures LLC, paid $25 million for the property May 4, 2016, at the time borrowing $18.5 million made up of a land loan and renovation loans, from Bank OZK. Stellar owned 80.1 percent while City Urban Realty owned 19.9 percent, according to a 2017 property filing separating their ownership stakes into two limited liability companies with a tenant in common interest in the property.
In 2019, the parties refinanced the building with a $21 million loan from Signature Bank. The original maturity date was June 13, 2022, but that was extended several times, with the final maturity date of June 30, 2024. The borrowers allegedly did not repay the loan, and so Blackstone Group, which bought a portfolio of Signature Bank loans, sent a letter dated August 1, 2024, notifying borrowers that it classified the loan as in a payment default. In April 2025, according to the complaint, Blackstone, “made demand that Borrowers deliver all Rents to Lender.”
The property
The office building in Little Italy has 21,700 square feet of built space and 16,855 square feet of additional air rights for a total buildable of 38,570 square feet according to a PincusCo analysis of city data. The parcel has frontage of 37 feet and is 115 feet deep with a total lot size of 3,857 square feet. The lot is irregular. The zoning is M1-5/R10 which allows for up to 5 times floor area ratio (FAR) for manufacturing and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $2.3 million.
Prior sales and revenue
This property was sold for $25 million on May 4, 2016.
The 21,700-square-foot property generated revenue of $805,179 or $37 per square foot, according to the most recent income and expense figures.
Violations and lawsuits
According to city public data, the property has received $4,250 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 Little Italy, The bulk, or 33 percent of the 4.1 million square feet of commercial built space are office buildings, with walkup buildings next occupying 25 percent of the space. In sales, Little Italy has near average sales volume among other neighborhoods with $230 million in sales volume in the last two years and is the 28th highest in Manhattan. For development, Little Italy has near average amount of major developments among other neighborhoods and is the 42nd highest in Manhattan. It had 91,858 square feet of commercial and multi-family construction under development in the last two years, which represents 2 percent of the neighborhood’s built space.
The block
On this tax block, PincusCo has identified the owners of one of the five commercial properties representing 17,260 square feet of the 86,160 square feet. The identified owner is First Atlantic Capital. There are no active new building construction projects on this tax block.
The surrounding
Within a 400-foot radius of 243 Canal Street, PincusCo identified three commercial real estate items of interests occurred over the past 24 months. One of those three items was a sale which Eshagh Moezinia Family Trust bought the 11,500-square-foot, five-unit mixed-use building (K4) on 271 Canal Street for $6.5 million from Bruce Fung on October 3, 2024. Of those three items, two were loans above $5 million totaling $21 million. The most recent of the two was Yue Wang and Teddy Tie Cheng Li in which borrowed $5 million from New Millennium Bank secured by the 27,872-square-foot, two-unit rental (HR) on 88 Walker Street on October 20, 2023.
Direct link to the property’s ACRIS page and link to DOB NOW portal.