Meritz Financial buys $128M note at Brookfield office in foreclosure in Brooklyn Heights

Korea-based Meritz Financial Group through the entity Nonhyup Bank (Acting As The Trustee) bought a note with an original principal of $128 million from Series 2019-CORE secured by Brookfield Properties’s office building (O6) at 135 Pierrepont Street in Brooklyn Heights, Brooklyn.
The deal closed on April 1, 2015 and was recorded on April 11, 2025. The prior lender was Series 2019-CORE which held debt that had an original loan amount of $128 million. The property has 725,991 square feet of built space according to a PincusCo analysis of city data.
A special servicer on behalf of Series 2019-CORE filed the pre-foreclosure action Brooklyn on November 15, 2024, 531027/2024. The case remains ongoing.

Prior sales and revenue

The 725,991-square-foot property generated revenue of $29.4 million or $40 per square foot, according to the most recent income and expense figures.

The property

The office building in Brooklyn Heights has 725,991 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 67 feet and is 285 feet deep with a total lot size of 45,780 square feet. The lot is irregular. The zoning is C6-4 which allows for up to 10 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $151.2 million.

Violations and lawsuits

The property was involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $128 million commercial foreclosure concerning a loan filed on November 15, 2024, by Series 2019-CORE and CWCapital Asset Management against Brookfield Properties. In addition, according to city public data, the property has received $6,685 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on May 8, 2018. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Brooklyn Heights, The bulk, or 26 percent of the 12.1 million square feet of commercial built space are office buildings, with elevator buildings next occupying 23 percent of the space. In sales, Brooklyn Heights has 1.8 times the average sales volume among other neighborhoods with $486.8 million in sales volume in the last two years and is the 12th highest in Brooklyn. For development, Brooklyn Heights has near average amount of major developments among other neighborhoods and is the 16th highest in Brooklyn. It had 1.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 9 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other office buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of one of the two commercial properties representing 725,991 square feet of the 753,671 square feet. The identified owner is Brookfield Properties.
On the tax block, there was one new building construction project filed totaling 294,379 square feet. It is a 134-unit, 294,379 square-foot residential (R-2) building submitted by Hudson Companies and filed by Sally Gilliland with plans filed January 18, 2016 and permitted July 20, 2017.

The majority, or 96 percent of the 753,671 square feet of built space are office buildings, with specialty buildings next occupying 4 percent of the space.

The borrower

The PincusCo database currently indicates that Brookfield Properties owned at least 56 commercial properties with 4,799 residential units in New York City with 24,876,733 square feet and a city-determined market value of $5.7 billion. (Market value is typically about 50% of actual value.) The portfolio has $11.7 billion in debt, with top three lenders as Wells Fargo, JPMorgan Chase, and ING Capital respectively. Within the portfolio, the bulk, or 60 percent of the 24,876,733 square feet of built space are office properties, with elevator properties next occupying 20 percent of the space. The bulk, or 72 percent of the built space, is in Manhattan, with Brooklyn next at 21 percent of the space.

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