Blackstone, Rialto acquire Wharton Properties retail in Brooklyn Heights for $8.6M in outstanding debt

Lenders Blackstone Group and Rialto Capital Management through the entity Rss Sig Cre 2023 – Ny 1ms, LLC acquired the retail condominium unit at 160 Montague Street in Brooklyn Heights, Brooklyn, from Wharton Properties through the entity 160 Montague Street LLC, in a transfer valued at $8.56 million.
The deal closed on June 27, 2025 and was recorded on July 29, 2025. The property has 2,491 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $3,439 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The signatory for Wharton Properties was Jeff Sutton . The signatory for Blackstone Group and Rialto Capital Management was Blackstone’s Albert Picallo . The contract date was June 27, 2025.

Although this has some of the characteristics of of a deed-in-lieu of foreclosure — for example the sale price close to the outstanding debt — it is not, it is a sale. However, it is not a market sale, and the sale price is not a true reflection of the value of the property, which is worth less, according to insiders.

The lenders acquired the property using a credit bid of the outstanding debt, according to information provided to PincusCo.

Wharton Properties in partnership with Othon Mourkakos paid $4 million for the property May 12, 2008. In that transaction, Othon Mourkakos controlled the residential portion of the property and Sutton the retail. They then split the property in 2009 into a residential condominium unit and a retail unit, with Sutton owning the retail condo and Mourkakos owning the residential. In October 2009, Sutton borrowed $6,57 million from Signature Bank. Blackstone and Rialto took over a portfolio of Signature loans including this one after the bank was shuttered.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Blackstone Group purchased 33 properties in 15 transactions for a total of $803.1 million and sold 33 properties in three transactions for a total of $574.3 million over the past 24 months.
The seller Wharton Properties purchased seven properties in five transactions for a total of $85.7 million and sold 18 properties in 13 transactions for a total of $1.9 billion over the same time period.

The property

The retail condo in Brooklyn Heights has 2,491 square feet of built space according to a PincusCo analysis of city data. The parcel has a total lot size of 2,491 square feet. The city-designated market value for the property in 2022 is $742,004.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has not received any significant violations in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Brooklyn Heights, The bulk, or 26 percent of the 12.1 million square feet of commercial built space are office buildings, with elevator buildings next occupying 23 percent of the space. In sales, Brooklyn Heights has 2.3 times the average sales volume among other neighborhoods with $633.7 million in sales volume in the last two years and is the 8th highest in Brooklyn. For development, Brooklyn Heights has had very little major development activity relative to other neighborhoods.It had 1.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 10 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 16 of the 20 commercial properties representing 126,865 square feet of the 166,939 square feet. The largest owner is Juan Rivera, followed by Conway Capital and then Russell Harkavy.
There are no active new building construction projects on this tax block.

The majority, or 39 percent of the 166,939 square feet of built space are mixed-use buildings, with walkup buildings next occupying 36 percent of the space.

The seller

The PincusCo database currently indicates that Wharton Properties owned at least 87 commercial properties with 204 residential units in New York City with 3,303,019 square feet and a city-determined market value of $1.7 billion. (Market value is typically about 50% of actual value.) The portfolio has $263.8 million in debt, with top three lenders as Valley National Bank, Bank of China, and Provident Bank respectively. Within the portfolio, the bulk, or 68 percent of the 3,303,019 square feet of built space are office properties, with retail properties next occupying 20 percent of the space. The bulk, or 86 percent of the built space, is in Manhattan, with Brooklyn next at 10 percent of the space.

The buyer

The PincusCo database currently indicates that Blackstone Group owned at least 45 commercial properties with 14,164 residential units in New York City with 20,721,441 square feet and a city-determined market value of $4.6 billion. (Market value is typically about 50% of actual value.) The portfolio has $2.5 billion in debt, with top three lenders as Morgan Stanley, Wells Fargo, and NYC Housing Development Corporation respectively. Within the portfolio, the bulk, or 73 percent of the 20,721,441 square feet of built space are elevator properties, with office properties next occupying 21 percent of the space. The bulk, or 87 percent of the built space, is in Manhattan, with Queens next at 10 percent of the space.
The PincusCo database currently indicates that Rialto Capital Management owned at least two commercial properties with eight residential units in New York City with 118,813 square feet and a city-determined market value of $74.5 million. (Market value is typically about 50% of actual value.) The portfolio has $5 million in debt, borrowed from Signature Bank. Within the portfolio, the bulk, or 95 percent of the 118,813 square feet of built space are office properties, with walkup properties next occupying 5 percent of the space. The bulk, or 95 percent of the built space, is in Manhattan, with Brooklyn next at 5 percent of the space.

Direct link to Acris document. link