Courts roundup: Receiver for $77M Walter & Samuels building; $21M LIC note sold; Auction set for Sugar Hill rental

Receiver appointed in $77M Walter & Samuels office building foreclosure: A State Supreme Court judge appointed a referee in a pre-foreclosure case related to a $77 million loan secured by the Walter & Samuels 143,479-square-foot office building at 315 West 36th Street in the Garment District, Manhattan. In related news, David Berley, of Walter & Samuels, filed an appeal of an April 2024 decision denying his motion to dismiss the complaint.

The special servicer, Midland Loan Services, on behalf of Series 2018-COR3, filed the pre-foreclosure complaint in New York State Supreme Court on September 20, 2023. LINK

The receiver is authorized to accept the rents from the tenants.

In February 2018, Deutsche Bank provided David Berley’s Walter & Samuels investment firm $77 million. That loan was packaged into a securitized loan product and sold to bondholders. Walter & Samuels is a major commercial landlord, with a concentration in the Garment District and Midtown South.

In February 2023, Fitch Ratings reported, “A top loan loss contributor, 315 West 36th Street (4.7%), is secured by a 143,479-sf office building with some retail located in Midtown Manhattan, proximate to Penn Station and the Port Authority Bus Terminal. Floors 11 and above of the building are residential and not part of the collateral. WeWork leases all the office space (93% of NRA) under two separate leases, which expire in February 2032 and May 2031. Fitch’s base case loss of 22% reflects a 9.25% cap rate and 25% haircut to the YE 2020 NOI to account for WeWork exposure, resulting in a stressed value of $297 psf.”

Direct link to Acris document. link

Investors buy $21M LIC hotel note in foreclosure: Three investors under the name STN Funding LLC bought a note with an original principal of $21 million secured by the hotel at 39-05 29th Street in Long Island City, Queens, owned by Hafeez Choudhary’s Queens Plaza North, LLC.

The principals of STN Funding LLC are Amran Niazi, Arif Soni and Tariq Mahmud.

The complex case involves a pre-foreclosure action filed by the securitized lender COMM 2015-CCRE23 in March 2022, (705262/2022), a bankruptcy case filed by Hafeez Choudhary’s note buying entity 39-05 29th St Hotel LLC, (8-23-72250-reg) and later another case, in which the lender COMM 2015-CCRE23 is suing the note buying entity 39-05 29th St Hotel LLC for $1 million deposit as liquidated damages related to a previous attempt to sell the note. 654401/2023.

The hotel building in Long Island City has 63,839 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 100 feet and is 100 feet deep with a total lot size of 12,509 square feet. The zoning is M1-2/R5D which allows for up to 2 times floor area ratio (FAR) for manufacturing and up to 2 times FAR for residential. The city-designated market value for the property in 2022 is $13.7 million.
This property was sold for $21.9 million on December 31, 2014.

Direct link to the property’s ACRIS page.

$5.3M auction date set for Sugar Hill Harlem rental: A referee set a May 29, 2024, auction date for a 22-unit rental building owned by Sugar Hill Capital Management, at 121 West 116th Street in Harlem, Manhattan, that has $5.3 million judgment, court records show. The lender,
Series 2020-SB80 through its special servicer CWCapital Asset Management, filed a pre-foreclosure action against Sugar Hill Capital Partners on this loan and three other loans in January 2023, totaling $12.6 million. Another property had an April auction date and two other loans do not yet have auctions set for their properties.
The walkup building with 22 residential units in Harlem has 17,910 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 41 feet and is 100 feet deep with a total lot size of 4,205 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 $2.4 million. This property was sold for $7.5 million on December 10, 2018.

Direct link to the property’s ACRIS page.
Case 850007/2023 LINK