Lender alleges $16.7M owed on Carnegie Hill rental in foreclosure

1442 Lexington Avenue (Credit - Google)

1442 Lexington Avenue (Credit - Google)

The special servicer for a loan in foreclosure secured by the 16-unit rental at 1442 Lexington Avenue in Carnegie Hill alleged in a filing yesterday the borrower owes a total of $16.7 million on a loan provided in 2018 with an original principal of $11.6 million.
No sale date has been set, but the court in December 2021 awarded the lender summary judgment for the foreclosure.

The special servicer, representing bondholders of the securitized debt known as Series 2018-C44, filed to foreclose on the asset owned by Prime Rok Real Estate in May 2021 in U.S. District Court in Manhattan, as PincusCo reported at the time. In December 2021, the judge ruled in favor of the plaintiffs through summary judgment, but the borrower then appealed.
In February 2023 the appeals court dismissed the appeal, stating the court did not have jurisdiction because the foreclosure sale had not been completed.
According to the ruling, “This case presents an apparently unresolved question in this Circuit: whether a district court’s order granting a purportedly final judgment on a noteholder’s claims seeking (1) foreclosure on a mortgage, (2) foreclosure on a security interest in real property, and (3) possession of said real property is an appealable final judgment – even though the order also refers the case to a magistrate judge to calculate the amount of the judgment of foreclosure and sale. Because we conclude that such a judgment is not in fact “final” within the meaning of 28 U.S.C. § 1291, and that no other basis for appellate jurisdiction exists, we dismiss the appeal.”

The special servicer, Rialto Capital Advisors alleges the debtor, the entity 1442 Lexington Operating DE LLC,  owes $16.7 million. Prime Rok, led by Afshin Hedvat, along with Daniel Rahmani, bought the property in 2017 for $15.8 million.

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

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