Lender Ready Capital acquires Little Italy retail, office through foreclosure

Lender Ready Capital took title to the Little Italy retail and office building at 158 Lafayette Street, also known as 151 Grand Street, through a foreclosure auction held on October 16. It won with a credit bid of $100.

A referee appointed by a New York State Supreme Court justice set October 16, 2024, as the date for a foreclosure auction for the property which had a judgment lien of $35.3 million. The property was jointly owned by Dan Arev’s Link Real Estate and investor Baruch Singer, and had no income, according to court filings.

The referee, Mark L. McKew, disclosed the auction date in a notice of sale dated September 11, 2024.

Court 850041/2022 LINK

The owners stalled on a conversion of the property, a project originally filed in 2015 under Department of Buildings job number 122467678, by then-owner Princeton Holdings, calling for a, “change of use at 2nd to 5th floors to Use Group 6 business occupancy and construction of new 6th story. Obtain new certificate of occupancy.” The existing retail on the first floor would remain.

Ready Capital through its affiliate Ready Capital Mortgage Financing 2019-FL3 filed to foreclose on the loan with an original principal of $28.775 million provided in 2018 to an affiliate of Dan Arev’s Link Real Estate, according to a suit filed February 15, 2022, in New York State Supreme Court. The borrower entity was PB 151 Grand LLC.

The lender in the complaint alleged the borrowers defaulted on the loan by not making a payment due on May 10, 2020, during Covid. The parties then entered into a forbearance agreement that took effect October 10, 2020. The lender said the borrowers defaulted on that agreement by failing to make a payment due April 10, 2021.
Court filings reflect the position of one party and are not necessarily accurate or complete.

Dan Arev, in court filings, disputed the lender’s version of events, alleging the lender was at fault for the defaults. “The Lender wrongfully withheld requisition payments, overpaid for work that was not performed and ultimately refused to fund over $2,000,000 forcing the contractor to walk off the job,” according to court filings.
Baruch Singer submitted an affidavit in 2023, citing alleged construction errors and funding shortfalls that led to the default.

An affiliate of the Bluestone Group with an address at Princeton Holdings bought the property in 2014 for $14.25 million in 2014, with Bluestone principal Marc Mendelsohn as signatory and Eli Tabak as the signatory on loans provided in 2017. Then the owner entity refinanced the property in 2018 with Ready Capital, and at that time the owner entity was at Link Real Estate and the signatory was Dan Arev. Ownership transferred through a “structured sale”, a source said.

The property

The retail building in Little Italy has 26,388 square feet of built space and 15,703 square feet of additional air rights for a total buildable of 42,100 square feet according to a PincusCo analysis of city data. The parcel has frontage of 23 feet and is 105 feet deep with a total lot size of 4,210 square feet. The lot is irregular. The zoning is M1-5/R10 which allows for up to 5 times floor area ratio (FAR) for manufacturing and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $6.5 million.

Prior sales and revenue

This property was sold for $14.2 million on April 1, 2014.

The neighborhood

In Little Italy, The bulk, or 33 percent of the 4.1 million square feet of commercial built space are office buildings, with walkup buildings next occupying 25 percent of the space. In sales, Little Italy has near average sales volume among other neighborhoods with $256.9 million in sales volume in the last two years and is the 29th highest in Manhattan. For development, Little Italy has near average amount of major developments among other neighborhoods and is the 36th highest in Manhattan. It had 270,305 square feet of commercial and multi-family construction under development in the last two years, which represents 7 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of eight of the 13 commercial properties representing 396,187 square feet of the 443,531 square feet. The largest owner is Boquen Realty, followed by Cape Advisors and then Epic Llc. There are no active new building construction projects on this tax block.

The surrounding

Within a 400-foot radius of 151 Grand Street, PincusCo identified seven commercial real estate items of interests occurred over the past 24 months. Of those seven items, four were sales above $5 million totaling $159.2 million. The most recent of the four was Spear Street Capital which bought the 27,000-square-foot, six-unit office building (O5) on 446 Broadway for $52 million from KPG Funds on September 25, 2024. Of those seven items, three were loans above $5 million totaling $67.8 million. The most recent of the three was Spear Street Capital in which borrowed $33 million from Ladder Capital secured by the 27,000-square-foot, six-unit office building (O5) on 446 Broadway on September 25, 2024.

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