JY Capital Group buys $8.5M note secured by NoMad commercial in foreclosure

JY Capital Group through the entity Straits of JY Inc. bought a note with an original principal of $8.5 million from Thota Nagaraja secured by Osman Bessa’s office building (O5) at 33 West 26th Street in NoMad, Manhattan and four-unit mixed-use building (S4) at 35 West 26th Street in NoMad, Manhattan.
The deal closed on March 20, 2024 and was recorded on March 25, 2024. The prior lender was Thota Nagaraja which held debt that had an original loan amount of $8.5 million.The two properties have 20,065 square feet of built space and 29,295 square feet of additional air rights for a total buildable of 49,360 square feet according to a PincusCo analysis of city data.
According to PincusCo prior reporting. Alexander Hofstedter is the principal of the note-buying entity, Straits of JY Inc. and managing principal of JY Capital Group, according to the LinkedIn account. Thota Nagaraja bought the debt from Bethpage Federal Credit Union on March 18, 2024, and two days later on March 20, 2024, JY Capital Group bought the note.

The property is subject to a pre-foreclosure action, 850024/2023, filed January 2023, as PincusCo reported at the time. The initial plaintiff, Bethpage Federal Credit Union, won a summary judgment motion in December 2023. JY Capital Group now steps in as plaintiff.

The property

The zoning is M1-6 which allows for up to 10 times floor area ratio (FAR) for manufacturing. The property is in the Madison Square North Historic District. The city-designated market value for the property in 2022 is $5.4 million.

Violations and lawsuits

The properties were involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $8 million commercial foreclosure concerning a loan filed on January 18, 2023, by Bethpage Federal Credit Union against Osman Bessa. In addition, according to city public data, the properties have received one housing violation and $300 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 NoMad, The majority, or 66 percent of the 12.8 million square feet of commercial built space are office buildings, with hotel buildings next occupying 15 percent of the space. In sales, NoMad has had very little sales volume relative to other neighborhoods with $175.3 million in sales volume in the last two years. For development, NoMad has 2 times the average amount of major developments relative to other neighborhoods and is the 15th highest in Manhattan. It had 2 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 were three pre-foreclosure suit filed among other mixed-use buildings in the past 12 months.

The block

On the tax block of 35 West 26th Street, PincusCo has identified the owners of 14 of the 33 commercial properties representing 1,197,698 square feet of the 1,924,865 square feet. The largest owner is Wisdom Global Realty New York Llc, followed by Singh Equities and then S.W. Management.
There are no active new building construction projects on this tax block.

The majority, or 69 percent of the 1.9 million square feet of built space are office buildings, with elevator buildings next occupying 25 percent of the space.

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