Lender files $15M pre-foreclosure at RFR’s Flatiron retail property

Lender Union Labor Life Insurance Company filed a $15 million pre-foreclosure action at RFR Holdings’ Flatiron retail property at the 5,920-square-foot 670 Sixth Avenue, at the corner of 21st Street. RFR Holding is led by Aby Rosen and Michael Fuchs, who are identified in the complaint as obligors under the loan documents. The complaint alleges the borrower did not make the payment due on July 10, 2023.
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Court filings represent the position of one party and are not necessarily accurate or complete.

RFR Holding has lost several properties over the past two years, including the Gramercy Hotel, but has also made significant acquisitions and refinancing including paying $291 million for 475 Fifth Avenue.

According to the complaint, “On or about May 15, 2014, Plaintiff made a loan to Borrower in the principal sum of $15,000,000.00… Obligors and Plaintiff entered into an Omnibus Amendment to Mortgage Loan, dated May 15, 2019, which, inter alia, extended the Maturity Date of the Loan from May 15, 2019 through August 15, 2019 and modified the Interest Rate of the Loan… [on] August 15, 2019, [the parties] further extended the Maturity Date of the Loan from August 15, 2019 through August 15, 2024… upon the occurrence of an Event of Default, interest shall accrue at the default interest rate equal to the greater of (a) 150% of the Interest Rate per annum, and (b) the U.S. Prime Rate plus five percent (5%) per annum (the “Default Rate”)…Events of Default exist under the Loan Documents given that Borrower failed to make timely payments due under the Loans Documents, including (1) its monthly interest payments beginning with the payment due July 10, 2023 (the “Payment Default”) and (2) outstanding property taxes that are now delinquent in the amount of $187,101.94 and outstanding water charges that are now delinquent in the amount of $1,066.86 (collectively, the “Tax Default”).”

The property

The office building in Flatiron District has 5,920 square feet of built space and 11,829 square feet of additional air rights for a total buildable of 17,759 square feet according to a PincusCo analysis of city data. The parcel has frontage of 40 feet and is 73 feet deep with a total lot size of 2,950 square feet. The zoning is C6-2A which allows for up to 6 times floor area ratio (FAR) for commercial and up to 6.02 times FAR for residential with inclusionary housing. The property is in the Ladies’ Mile Historic District. The city-designated market value for the property in 2022 is $7.4 million.

Prior sales and revenue

This property was sold for $22.5 million on May 15, 2014.

Violations and lawsuits

According to city public data, the property has received $950 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 Flatiron District, The majority, or 71 percent of the 23.2 million square feet of commercial built space are office buildings, with elevator buildings next occupying 15 percent of the space. In sales, Flatiron District has the 10th highest sale turnover among other neighborhoods in the city with $1.5 billion in sales volume in the last two years. For development, Flatiron District has near average amount of major developments among other neighborhoods and is the 10th highest in Manhattan. It had 2.5 million square feet of commercial and multi-family construction under development in the last two years, which represents 11 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 12 of the 24 commercial properties representing 582,975 square feet of the 1,040,488 square feet. The largest owner is Ashkenazy Acquisition, followed by Ezra Mashaal and then Hesky Haim. On the tax block, there was one new building construction project filed totaling 57,824 square feet. It is a one-unit, 57,824 square-foot residential (R-3) building submitted by Steven Mashaal with plans filed December 31, 2013 and permitted October 5, 2016.

The owner

The PincusCo database currently indicates that RFR Holding owned at least 15 commercial properties in New York City with 2,856,831 square feet and a city-determined market value of $1.2 billion. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 88 percent of the 2,856,831 square feet of built space are office properties, with hotel properties next occupying 8 percent of the space. They are all located in Manhattan.

The surrounding

Within a 400-foot radius of 670 Avenue of the Americas, PincusCo identified six commercial real estate items of interests occurred over the past 24 months. Of those six items, six were loans above $5 million totaling $124.3 million. The most recent of the six was Nuveen Real Estate in which borrowed $50.8 million from Nuveen Real Estate secured by one condo unit in the 39,004-square-foot, two-unit mixed-use building (RC) on 636 Avenue Of The Amer and one other property on July 13, 2023.

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