Chase files $30M pre-foreclosure at 6-story Chelsea retail

JPMorgan Chase filed a $30 million pre-foreclosure action at 547-553 West 27th Street, a six-story, 97,200-square-foot retail building in Chelsea, alleging the loan was in a payment default. The owner is Yitzhak Pastreich of Pinetree Group.

Case LINK
Yitzhak Pastreich, also known as James or Jim Pastreich, bought the building in 1999 for $750,000. He refinanced the building several times over the years, including the subject loan which he borrowed through the entity Mariners Gate LLC in April 2019. The loan totaled $30 million, provided by First Republic Bank. In addition, Pastreich obtained a $5 million subordinate loan from W Financial in August 2021.
According to the complaint, “On December 1, 2020, Borrower, Guarantor, and First Republic Bank, as lender, entered into that certain Credit Modification Agreement… The Loan has been in default since July 1, 2023 for failure to make required monthly payments. First Republic Bank and JPMC provided a number of notices of default to Borrower, but Borrower has failed to pay delinquent amounts due and owing, which will amount to $34,709,960 as of September 16, 2024.”
First Republic Bank became insolvent and JPMorgan Chase announced that on May 1, 2023, it acquired this and other loans.

Jim Pastreich of Pinetree Group, Inc. submitted a major alteration application for a renovation of an educational (E) building on November 3, 2021 under job number M00602023 and was permitted on December 29, 2021. It calls for a rehab of the six-story building and conversion to retail. The project is described in the filing as: application filed for the conversion of existing retail space to eating & drinking establishment. obtain new certificate of occupancy.

The property

The retail building in Chelsea has 97,200 square feet of built space and 32,649 square feet of additional air rights for a total buildable of 129,908 square feet according to a PincusCo analysis of city data. The parcel has frontage of 100 feet and is 197 feet deep with a total lot size of 17,275 square feet. The lot is irregular. 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 property is in the West Chelsea Historic District. The city-designated market value for the property in 2022 is $21.3 million. The most recent loan totaled $5 million and was provided by W Financial on August 27, 2021.

Development

For the tax lot building, it received its initial certificate of occupancy on December 28, 2018.

Violations and lawsuits

According to city public data, the property has received one DOB violation and $7,840 in OATH penalties in the last year.

The property was involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $30 million commercial foreclosure concerning a loan filed on September 19, 2024, by JPMorgan Chase against Yitzhak Pastreich and Pinetree Group.

The neighborhood

In Chelsea, The bulk, or 36 percent of the 52.4 million square feet of commercial built space are office buildings, with elevator buildings next occupying 28 percent of the space. In sales, Chelsea has the 9th highest sale turnover among other neighborhoods in the city with $1 billion in sales volume in the last two years. For development, Chelsea has near average amount of major developments among other neighborhoods and is the 20th highest in Manhattan. It had 1.6 million square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of eight of the 14 commercial properties representing 295,568 square feet of the 410,898 square feet. The largest owner is Atlantic Development Group, followed by James Y.A. Pastreich and then Kamran Hakim. On the tax block, there was one new building construction project filed totaling 148,957 square feet. It is a 40-unit, 148,957 square-foot residential (R-2) building submitted by Related Companies and filed by Gregory Gushee with plans filed July 30, 2013 and permitted February 12, 2015.

The owner

The PincusCo database currently indicates that James Y.A. Pastreich owned at least one commercial property in New York City with 97,200 square feet and a city-determined market value of $21.3 million. (Market value is typically about 50% of actual value.) The portfolio has $5 million in debt, borrowed from W Financial. The portfolio consists of at least a single retail property. It is located in Manhattan.

The surrounding

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