Courts roundup: $4M Harlem pre-foreclosure, $2.3M E. W’burg bankruptcy, $2.2M Harlem breach of sale contract

$4.1M pre-foreclosure in Harlem: The special servicer for a $4.1 million loan, which Ladder Capital originated in 2017 and securitized as Series 2017-LC26, filed a pre-foreclosure action against property owned by Javier Martinez of Artifact. The loan is secured by 1871 Amsterdam Avenue (tax lot 64) which is a 19.5-foot-wide tax lot, as well as a tax lot and air rights that are now part of an adjacent development site with the address 1861 Amsterdam Avenue. The tax lots that are part of the loan and part of the new development are the former tax lot 75, which is now part of a larger 100-foot by 100-foot Artifact development site, and the air rights and cantilever portion of lot 1, which is the development site.
Court filings represent the position of one party and are not necessarily accurate or complete.

The lending market has slowed and that has made it more difficult generally to refinance. It is not know if that has impacted this or any other of these cases.

In a related loan, in December 2020, Martinez obtained a $10.1 million loan secured by the development site. Artifact Real Estate Development Company submitted a new building construction project for a 47-unit, 38,108 square-foot residential (R-2) building at 1861 Amsterdam Avenue in Harlem, Manhattan. The plan was filed with the New York City Department of Buildings on January 4, 2022 under job number M00651526. It calls for the construction of a five-story building. The project is described in the filing as: it is proposed to erect a new 5 story building as shown on plans. According to the pre-foreclosure complaint, “Borrower failed to timely pay the Monthly Debt Service Payment Amount on the July 2021 and August 2021 Monthly Payment Dates and each Monthly Payment Date thereafter (the “Payment Defaults”)… The Stated Maturity Date as defined in the Loan Agreement was June 6, 2022. By way of the July 12, 2022 Notice of Default (as defined below), Plaintiff, inter alia, notified Borrower and Guarantor of the existence of the Maturity of Loan Default and the continued existence of the Monthly Debt Service Payment Defaults and the Cash Management and Reserve Funds Default.” LINK

$2.3M bankruptcy in East Williamsburg: Property owner and petitioner Daniel Hilpert states the property 16 Judge Street in East Williamsburg is worth $2.3 million and the debt held by Amalgamated Bank is $2.34 million, indicating the property is worth slightly less than the debt. The walkup building with eight residential units in East Williamsburg has 5,760 square feet of built space according to a PincusCo analysis of city data. The property is owned by Daniel Hilpert. The parcel has frontage of 24 feet and is 109 feet deep with a total lot size of 2,675 square feet. The lot is irregular. The zoning is R6B which allows for up to 2 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $1.6 million. LINK

$2.2M Harlem breach of sale contract: The Daniel Group alleges it signed a contract as seller with the entity SWGC 117 LLC as buyer to sell a nine-unit building in Harlem at 117 West 111th Street for $2.215 million. According to the complaint, the sale was expected to close November 30, 2022, but the buyer did not show. The Daniel Group seeks to retain the deposit, but the contract vendee has not agreed to release it from escrow, according to the complaint. Daniel Group bought the property in 2014 for $1.09 million.
According to the complaint, “on or about July 26, 2022, plaintiff and defendant entered into a Purchase and Sale Agreement (“Agreement”) for the premises known as and located at 117 West 111th Street, New York, New York…” The contract vendee put $221,500 in escrow, with the closing set for November 30. The seller attended the closing but the buyer did not, and now the seller seeks to keep the down payment as a result of the allegedly broken contract. According to PincusCo analysis of city records, the property is a walkup building with nine residential units in Harlem with 4,335 square feet of built space and 878 square feet of additional air rights for a total buildable of 5,208 square feet. The parcel has frontage of 15 feet and is 100 feet deep with a total lot size of 1,514 square feet. The zoning is R7-2 which allows for up to 3.44 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $643,000. LINK

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