Extell revealed as partner with Bluestone as lender on defaulted $116M Gans portfolio loan

Gary Barnett’s Extell Development was revealed to be a partner with the Bluestone Group in an entity that is the new lender on a defaulted $116 million loan extended to lumber company and strip club owner Robert Gans and secured by a 1 million square foot portfolio centered on the West Side. Extell was disclosed as a partner in a document filed in a new lawsuit brought against Gans, which alleges that he and a related company had not exercised a purchase option for the small property at 605 West 45th Street. The new entity that owns the loan is Clinton PB Holdings I LLC. LINK

Extell and Bluestone did not immediately respond to requests for comment.

If Extell can acquire control of this site from Gans, who still owns the portfolio, it would provide the developer another site on which to build a large skyscraper. Extell and Bluestone worked together about 10 years ago on the Ring portfolio.

PincusCo reported last month that Bluestone acquired the debt from the former senior lender Mack Real Estate Credit Strategies for $147.8 million on April 15.

According to a document filed in the new case, the total outstanding balance plus penalties, fees and other costs on the loan was $178.2 million.

PincusCo reported in January that Bluestone had signed a purchase option to acquire the debt. 

In 2018, Mack provided $130.2 million of senior financing (which was later reduced to $116 million) and Bluestone provided a $17.76 million mezzanine loan that “almost immediately went into default,” according to court filings. The initial maturity date for the mezzanine loan was October 1, 2020.

Then in October 2021, Mack filed to foreclose on the loan, which it had declared was in default.

Bluestone acquired control of one of the original 11 properties, 533 West 27th Street, through a UCC foreclosure auction in August 2021.