Flagstar files $100M pre-foreclosure at Extell’s Belnord retail

Flagstar Bank filed a pre-foreclosure action yesterday alleging a default on $100 million loan secured by two retail condominium units owned by Gary Barnett’s Extell Development located at the base of the 209-unit Belnord condominium building at 2360 Broadway on the Upper West Side of Manhattan. The bank alleges the loan is in default as of at least April 2024. The two retail units have a total of 65,438 square feet, with 23,493 square feet on the ground floor.
Case LINK

Crain’s reported last month that Extell Development filed an application with the city to allow a bank in a 4,639-square-foot portion of the retail at the corner of Broadway and 86th Street. That portion of the retail space has been vacant for more than 10 years, the application said. A city zoning regulation from 2012, Special Enhanced Commercial District 3, which runs from West 72nd to West 110th Streets on Broadway, prohibits street wall widths for banks along the ground floor to exceed 25 feet, and the application is an effort to allow a bank with more than 25 feet of frontage.

The pre-foreclosure action is also likely related to the decline in values for retail properties, which has led to a string of similar filings. The owners in some cases resolve the litigation with a sale above the loan value or a refinance, but in many other cases the owner loses the property through a foreclosure auction or a deed-in-lieu of foreclosure.

Extell bought the entire Belnord building in 1994 in a partnership with Property Markets Group and HFZ Capital Group, but bought out those partners later. In 2015 Extell sold the residential portion to HFZ for a reported $575 million and converted the building to residential condos. In 2021, The Real Deal reported HFZ’s partner Westbrook Partners had taken control of the condo project.

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