Helaba files $50M pre-foreclosure at 34th St. retail owned by Wharton Properties
27-29 West 34th Street (Credit - Cyclomedia)
The German bank Helaba , also known as Landesbank Hessen-Thuringen Girozentrale filed a $50 million pre-foreclosure action in New York State Supreme Court in Manhattan yesterday alleging payment and other defaults in the loan secured by Wharton Properties 27-29 West 34th Street in the Garment District of Manhattan.
Court filings represent the position of one party and are not necessarily accurate or complete.
Case LINK
Wharton Properties , led by billionaire retail investor Jeff Sutton , bought the property in a joint venture with SL Green Realty in January 2006. SL Green Realty sold its stake in the properties in 2013.
According to the complaint, “By letter dated April 17, 2025, Borrower was notified of the default with respect to the failure to pay, when due, real estate taxes for the Property… [Wharton Properties] defaulted thereunder because, among other things, Borrower failed to pay, when due, the monthly installment payment for August 2025… the principal balance due under the Loan Documents, which is the total of the principal due under the Note, as of the date hereof, is $48,357,685.00, plus late charges..”
Like many real estate investors in retail, Wharton Properties has been challenged by the drop in retail rents in certain submarkets in the city, including another pre-foreclosure on 34th Street. Yet the changes in value provide unusual opportunities. For example, this summer Sutton partnered with SL Green Realty to buy $101 million in debt at Sutton’s retail at 21 West 34th Street.
And in other trading areas, the company has benefitted, including on Upper Fifth Avenue where it sold retail assets to Prada for $835 million in late 2023 and to Kering for $963 million in early 2024.
Other recent Wharton Properties stories:
• Wharton Properties signs $100M refi with Rialto for retail in Harlem (August 04, 2025)
• Brookfield signs $462.3M refi with Cale Street Partners for Fifth Avenue retail (July 28, 2025)
• Wharton Properties, SLG buy $195M note secured by their Times Square retail (July 08, 2025)
• Wharton Properties signs $38.9M refi for Columbia U.-leased retail in UWS (July 07, 2025)
• Wharton Properties buys $3.75M note secured by its retail in Jamaica (June 18, 2025)
The property
The retail building in Garment District has 17,750 square feet of built space and 31,652 square feet of additional air rights for a total buildable of 49,380 square feet according to a PincusCo analysis of city data. The parcel has frontage of 25 feet and is 98 feet deep with a total lot size of 4,938 square feet. The zoning is C5-3 which allows for up to 15 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $37.8 million.
Prior sales and revenue
Wharton Properties signed a 15-year lease on June 30, 2021, with hotel company Sonder Holdings.
The 17,750-square-foot property generated revenue of $5.5 million or $311 per square foot, according to the most recent income and expense figures.
Development
Wharton Properties submitted a new building construction project for a 363-unit, 173,835 square-foot hotel/dormitory/shelter (R-1) building at 25 West 34 Street. The plan was filed on April 29, 2021. It calls for the construction of a 270-foot tall, 26-story building and was filed with the New York City Department of Buildings under job number M00509700. The architect is Sra Architecture + Engineering, Pc. The project is described in the filing as: new twenty-six story hotel building.
For the tax lot building, it received its initial certificate of occupancy on April 17, 2013.
Violations and lawsuits
According to city public data, the property has received $300 in OATH penalties in the last year.
There were no lawsuits or bankruptcies filed against the property for the past 24 months.
The neighborhood
In Garment District, The majority, or 69 percent of the 52.3 million square feet of commercial built space are office buildings, with hotel buildings next occupying 13 percent of the space. In sales, Garment District has the 8th highest sale turnover among other neighborhoods in the city with $1.3 billion in sales volume in the last two years. For development, Garment District is the 5th most active neighborhood among other neighborhoods. It had 11.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 23 percent of the neighborhood’s built space.
The block
On this tax block, PincusCo has identified the owners of 12 of the 16 commercial properties representing 1,309,345 square feet of the 1,462,940 square feet. The largest owner is Bldg Management, followed by Icecap Group and then Jtre. On the tax block, there was one new building construction project filed totaling 173,835 square feet. It is a 363-unit, 173,835 square-foot hotel/dormitory/shelter (R-1) building submitted by Wharton Properties and filed by Andrew Lester with plans filed April 29, 2021 and it has not been permitted yet.
The owner
The PincusCo database currently indicates that Sonder Holdings owned at least one commercial property in New York City with 17,750 square feet and a city-determined market value of $40.5 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single retail property. It is located in Manhattan.
The surrounding
Within a 400-foot radius of 27 West 34 Street, PincusCo identified nine commercial real estate items of interests occurred over the past 24 months. Of those nine items, two were sales above $5 million totaling $39.3 million. The most recent of the two was Series 2019-BNK19 which bought the 71,180-square-foot, 16-unit office building (O6) on 29 West 35th Street for $22.8 million from Paul Shapour Sohayegh and Roni Movahedian on October 2, 2024. Of those nine items, seven were loans above $5 million totaling $427.3 million. The most recent of the seven was JEMB Realty in which borrowed $275 million from Corebridge Financial secured by two condo units in the 710,420-square-foot, 691-unit mixed-use building (RM) on 50 West 34th Street on September 2, 2025.
Direct link to the property’s ACRIS page and link to DOB NOW portal.