CMBS lender takes back Hell’s Kitchen retail, garage with $19.9M loan

A joint venture including Ashkenazy Acquisition through the entity 555 Retail Owner LLC, lost three retail and garage condominium properties at 555 West 59th Street in Hell’s Kitchen, Manhattan, that once secured a $19.9 million loan, to it lender in a foreclosure auction earlier this month. The new owners are the bondholders of a commercial mortgage-backed security, COMM 2014-CCRE16, managed by special servicer LNR Partners, through the entity Comm 2014-Ccre16 West 59th Street, LLC.

The transfer closed on April 11, 2024 and was recorded on April 23, 2024. The three properties have 46,359 square feet of built space according to a PincusCo analysis of city data.

Ben Ashkenazy of Ashkenazy Acquisition was the sponsor according to the 2014 CMBS prospectus.

The signatory for the court was Matthew Mannion. The signatory for COMM 2014-CCRE16 was Arnold Shulkin. The contract date was April 11, 2024.
The transfer value in Acris was $5.8 million, which was the credit bid by the lender, for an asset with an original loan principal of $19.9 million and a judgment of $23.4 million, according to the notice of sale. The auction was April 3, 2024.

The former owner group which also included Ashkenazy Acquisition, paid property developer Brack Capital Real Estate $23 million for the three retail condo units in 2014, then borrowed the $19.9 million, which was later securitized. Meir Cohen’s Cohen Equities, which was the original address for the buyer entity 555 Retail Owner LLC, was originally a contract vendee for the units, then flipped the contract in 2014 and only maintained an “insignificant” interest after that, according to a source familiar with the transaction.

LNR filed the pre-foreclosure action 850277/2021 in 2021.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer COMM 2014-CCRE16 had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Cohen Equities had not purchased any other properties and had not sold any properties over the same time period.

Violations and lawsuits

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

Development

For the tax lot buildings, one out of the three buildings received a initial certificate of occupancy in the last ten years. 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 Hell’s Kitchen, The bulk, or 39 percent of the 40.6 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 18 percent of the space. In sales, Hell’s Kitchen has 2.6 times the average sales volume among other neighborhoods with $730 million in sales volume in the last two years and is the 12th highest in Manhattan. For development, Hell’s Kitchen is the 8th most active neighborhood among other neighborhoods. It had 5.4 million square feet of commercial and multi-family construction under development in the last two years, which represents 13 percent of the neighborhood’s built space.

The block

On the tax block of 555 West 59th Street, PincusCo has identified the owners of one of the two commercial properties representing 8,300 square feet of the 411,007 square feet. The identified owner is Project Renewal.
On the tax block, there was one new building construction project filed totaling 44,879 square feet. It is a 26-unit, 44,879 square-foot hotel/dormitory/shelter (R-1) building submitted by Project Renewal and filed by Paul Woody with plans filed July 7, 2021 and permitted July 21, 2023.

The majority, or 98 percent of the 411,007 square feet of built space are elevator buildings, with specialty buildings next occupying 2 percent of the space.

Correction: An earlier version of this post indicated Cohen Equities was the majority owner of the asset before it was lost to the lender, when in fact it only owned a small fraction.

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