Fannie Mae filed pre-foreclosure actions against 11 residential rental properties in Manhattan and the Bronx with $72.3 million in original principal from loans given in 2019 and 2020. The properties are owned by affiliates of Douglas Peterson’s City Skyline Realty.
This action comes almost two months after CMBS loan trustees filed pre-foreclosure actions against four City Skyline Realty affiliates with original principal loans totaling $26 million, secured by Harlem rentals.
Many owners of rent-regulated housing in New York City were negatively impacted by Covid and tenants winning rent-overcharge cases.
In some cases, lenders must file pre-foreclosure actions in order to discuss renegotiate loan terms. It was not known if that was the case here. The guarantors of the loans signed signed a pre-negotiation letter with Fannie Mae in August, according to the complaint.
Court filings represent the position of one party and are not necessarily accurate or complete.
In this new action, filed October 30, 2023, in the Southern District of New York, Fannie Mae alleges the affiliates of City Skyline Realty, led by Douglas Peterson, borrowed a total of $72.3 million in 2019 and 2020 in loans secured by 11 rental properties in Manhattan and the Bronx, and they are all in default.
The loans were originated by Arbor Realty Trust and then bought by Fannie Mae. The properties are 2705 Morris Avenue, 561 West 144th Street, 622 East 169th Street, 2707 Morris Avenue, 2120-2126 Tiebout Avenue, 452 West 164th Street, 503 West 169th Street, 505 West 135th Street, 522 West 148th Street, 554 West 148th Street and 712 West 180th Street. The largest loan totaling $11.925 million. is secured by 2126 Tiebout Avenue, a 75-unit rental building in Fordham Heights.
According to the complaint, “Plaintiff has mortgages on each of the Properties, which secure loans that have been in default since the beginning of 2023… Each mortgage loan is guaranteed by Douglas Peterson [and others]… [For the Tiebout Avenue loan] On December 27, 2019, Douglas Peterson and [another partner] executed a Guaranty of Non-Recourse Obligations to and for the benefit of Arbor … On or about February 1, 2023, Defendant 2120 Tiebout LLC failed to pay the Monthly Payment due as required under the Loan Documents… On or about April 1, 2023, Defendant 452 W 164 Realty LLC failed to pay the Monthly Payment…The demand letters sent on April 25, 2023 and May 31, 2023 (the “Demand Letters”) are substantially similar in substance and terms. In July 2023, on behalf of Borrower-Defendants, Douglas Peterson [and other guarantors] sought to discuss the problems associated with the Loans. On August 1, 2023, on behalf of Borrower-Defendants, Douglas Peterson [and other guarantors] signed a pre-negotiation letter establishing the terms and conditions for negotiations over the Loans for the Properties (the “PNL”).”
The PincusCo database currently indicates that City Skyline Realty owned at least 45 commercial properties with 1,096,114 square feet, 1,277 residential units and a city-determined market value of $90.7 million. (Market value is typically about 50% of actual value.) The portfolio has more than $100 million in debt, with top three originating lenders as Arbor Realty Trust, Signature Bank, and New York Community Bank respectively. Within the portfolio, the bulk, or 70 percent of the 1,096,114 square feet of built space are walkup properties, with elevator properties next occupying 30 percent of the space. The bulk, or 61 percent of the built space, is in Manhattan, with Bronx next at 39 percent of the space.
Direct link to the property’s ACRIS page.