Junior debt sold at LIC hotel facing $8M foreclosure

Malka Gershomov as nominee for an anonymous buyer bought a note representing junior debt with an original principal of $911,489 from another anonymous individual in the care of Steven Adler as nominee, that was secured by Steven Baharestani and Martin Baharestani’s hotel building (H3) at 29-13 39th Avenue in Long Island City, Queens.
The deal closed on April 8, 2022 and was recorded on May 8, 2023. The property has 28,350 square feet of built space according to a PincusCo analysis of city data.
The signatory for Steven Baharestani and Martin Baharestani was Steven Baharestani. An anonymous lender provided $911,489 to Baharestanis, and then assigned that loan to another anonymous entity through Malka Gershomov with an address in Israel. The CMBS lender in March 2021 filed an action in federal court to foreclose on an $8 million senior mortgage, 1:21-cv-01347-RPK-RML and in an amended complaint describes the $911,489 loan as an additional cause of default since it was not approved. In addition, the Sela Group in March 2021 filed a lawsuit 705735/2021 that remains active seeking $1 million or to enforce the specific performance of Sela Group’s alleged purchase contract of the property.

The property

The hotel building in Long Island City has 28,350 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 25 feet and is 99 feet deep with a total lot size of 4,957 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 $4.8 million.

Violations

According to city public data, the property has received one DOB violation, $1,250 in ECB penalties, and $3,850 in OATH penalties in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Long Island City, The bulk, or 32 percent of the 60.1 million square feet of commercial built space are industrial buildings, with elevator buildings next occupying 31 percent of the space. In sales, Long Island City has the 9th highest sale turnover among other neighborhoods in the city with $1.7 billion in sales volume in the last two years. For development, Long Island City is the 4th most active neighborhood among other neighborhoods. It had 9.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 15 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other hotel buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of three of the 14 commercial properties representing 46,135 square feet of the 143,791 square feet. The largest owner is Thirtty Llc, followed by Nick Melissinos and then Kingdom Equities.
There are no active new building construction projects on this tax block.

The majority, or 45 percent of the 143,791 square feet of built space are industrial buildings, with walkup buildings next occupying 29 percent of the space.

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