Lender files $14M pre-foreclosure at Longwood retail

The trustee for the bondholders of the securitized trust Comm 2014-CCRE15 filed a pre-foreclosure action alleging a loan with an original principal of $14 million, and secured by the retail buildings 840 Westchester Avenue, 848 Westchester Avenue and 867 Longwood Avenue was in default.
The trustee filed the action in U.S. District Court in Manhattan on October 9, 2024.
Case 1:24-cv-07680 LINK

The Property is a two-story commercial property with approximately 53,705 rentable square feet of space, according to the complaint.

According to the complaint the defaults include, “(i) failing to pay interest on the Loan due on February 4, 2022; (ii) failing to pay interest on the Loan due on November 6, 2023; (iii) failing to pay interest on the Loan due on December 6, 2023; (iv) failing to pay the principal balance of the Loan, accrued and unpaid interest and other amounts due on the Maturity Date (as defined herein) of the Loan; (v) failing to pay interest at the Default Rate (as defined herein) from or after any Maturity Date; permitting or suffering Guarantor to file a voluntary bankruptcy petition under Chapter 13 of the Bankruptcy Code on or about December 19, 2023, and (xiii) permitting or suffering Guarantor to file a bankruptcy petition under Chapter 11 of the Bankruptcy Code on or about May 20, 2024, United States Bankruptcy Court, Southern District of New York, Case No. 24-22448…”

In addition, the complaint says, “Pursuant to the terms of the Loan Agreement, the Loan matured on the Maturity Date of January 6, 2024. Borrowers failed to pay Lender the outstanding principal balance of the Loan in the amount of $10,677,411… Upon information and belief, Guarantor [Bernard Putter], George Galgano, and David Linn, each an individual, are the only members of 840 Westchester Holdings LLC…”

The properties

The mixed-use building at 840 Westchester Avenue in Longwood has 33,660 square feet of built space and 6,956 square feet of additional air rights for a total buildable of 40,557 square feet according to a PincusCo analysis of city data. The parcel has frontage of 66 feet and is 167 feet deep with a total lot size of 11,790 square feet. The lot is irregular. The zoning is R7-1 which allows for up to 3.44 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $5.2 million.

The mixed-use building at 848 Westchester Avenue in Longwood has 16,085 square feet of built space and 6,978 square feet of additional air rights for a total buildable of 23,082 square feet according to a PincusCo analysis of city data. The parcel has frontage of 108 feet and is 105 feet deep with a total lot size of 6,710 square feet. The lot is irregular. The zoning is R7-1 which allows for up to 3.44 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $3.8 million.

The mixed-use building at 867 Longwood Avenue in Longwood has 26,075 square feet of built space and 8,300 square feet of additional air rights for a total buildable of 34,400 square feet according to a PincusCo analysis of city data. The parcel has frontage of 100 feet and is 100 feet deep with a total lot size of 10,000 square feet. The zoning is R7-1 which allows for up to 3.44 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $3.1 million.

Development

Hyun Kim Chang submitted a new building construction project for a educational (E) building at 840 Westchester Avenue. The plan was filed on December 14, 2004 and was permitted on July 24, 2006. It calls for the construction of a 35-foot tall, two-story building and was filed with the New York City Department of Buildings under job number 200924170.

Violations and lawsuits

According to city public data, the property has received one DOB violation and $590 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 Longwood, The bulk, or 44 percent of the 22.3 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 27 percent of the space. In sales, Longwood has near average sales volume among other neighborhoods with $84.6 million in sales volume in the last two years and is the 12th highest in Bronx. For development, Longwood has near average amount of major developments among other neighborhoods and is the 4th highest in Bronx. It had 1.4 million square feet of commercial and multi-family construction under development in the last two years, which represents 6 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of one of the six commercial properties representing 13,250 square feet of the 136,103 square feet. The identified owner is Shapour “Paul” Sohayegh. There are no active new building construction projects on this tax block.

The surrounding

This is the first commercial real estate event of interest identified within the 400-foot radius of 865 Longwood Avenue in the past 24 months.

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