UPDATED 2:30 p.m., Oct. 6, 2022: Lender LoanCore Capital filed a pre-foreclosure action against entities owned by Dune Real Estate Partners to recover a loan with an initial principal of $196 million that is secured by the retail and office building 111 East 59th Street in Midtown East, in Manhattan.
Dune Real Estate Partners, Princeton International Property and Empire Capital Holdings bought the building in 2015 for $170 million with financing from Deutsche Bank. In 2017 LoanCore refinanced that loan with a total of $196 million which included construction financing totaling $42 million. The complaint alleges the current outstanding debt is $193.4 million.
Empire Capital sold its stake in 2018, a person familiar with the transaction said, and is no longer involved with the property. Princeton International Property also sold its stake that year, according to a source, and is also no longer involved with the property.
Court filings are the positions of one party and are not necessarily accurate or complete. Court LINK
The Real Deal reported in 2015 that the owners’ ,”plans involve conversion for big box retail.”
Retail has been hit particularly hard in the past several years, especially in Midtown with the sharp declines in foot traffic as office workers and tourists stayed away. Shoppers and office workers are returning, providing a floor for retail in the area.
According to the complaint, “On September 8, 2017, Plaintiff LoanCore Capital Credit REIT LLC made three loans to Defendant 111 E. 59th Street JV SUB, LLC (“Borrower”), owner of the fee interest in the Premises (the “Loans”). The Loans were secured by, among other things, mortgages on the Property. The Borrower initially defaulted on the Loans by failing to pay the interest due and payable to Lender on the payment date of July 9, 2020. Subsequently, the Borrower defaulted on the Loans by failing to repay in full the Loans and all outstanding principal and accrued interest (the “Debt” and the “Other Debt”) on September 9, 2020 (the “Maturity Date”).”
The 115 East 59 Street parcel has frontage of 60 feet and is 200 feet deep with a total lot size of 12,050 square feet. The lot is irregular. The zoning is C5-2.5 which allows for up to 12 times floor area ratio (FAR) for commercial The city-designated market value for the property in 2022 is $73.7 million.
The office building in Lenox Hill has 170,511 square feet of built space according to PincusCo analysis of city data.
The 170,511-square-foot property generated revenue of $13.7 million or $80 per square foot, according to the most recent income and expense figures.
According to city public data, the property has received two DOB violations and $2,000 in OATH penalties in the last year.
On this tax block, PincusCo has identified the owners of two of the eight commercial properties representing 14,334 square feet of the 1,637,374 square feet. The two identified owners are Sol Goldman Investments and Joon S. Park. There are no active new building construction projects on this tax block.
Over the past five years, there have been 77 NYC Department of Buildings permit applications filed for this parcel valued at more than $20,000. There were 77 renovation/alteration projects (A2) applied for with a total estimated value of $8.8 million.
For the tax lot building, it received its renovation initial certificate of occupancy on July 2, 2018.
Within a 400-foot radius of 115 East 59 Street, Pincusco identified three commercial real estate items of interests occurred over the past 24 months. Of those three items, two were sales above $5 million totaling $19.8 million. The most recent of the two was Amerant Bank which bought the 4,100-square-foot, one-unit mixed-use building (K2) on 730 Lexington Avenue for $12.7 million from Ashkenazy Acquisition on October 21, 2021. One of those three items was a loan which Vrahos LLC borrowed $9.4 million from New York Community Bank secured by the 6,860-square-foot, nine-unit rental (C7) on 115 East 60th Street and three other properties on October 12, 2021.
Correction: A prior version of this article included Empire Capital Holdings as current owner of the property, but it sold its stake in 2018.
Clarification: A clarification was added to note Princeton International Properties sold its stake in 2018.