Michael Dell’s MSD Partners buys $174M note at Soho Properties’ FiDi tower, currently in foreclosure

Michael Dell’s affiliated investment firm MSD Partners last month acquired the construction debt with an original value of $174 million from lender Malayan Banking Berhad, which in 2016 provided the loan to Sharif El-Gamal’s Soho Properties for the construction of the 43-story condominium tower at 45 Park Place in the Financial District. The loan fell into default and Malayan filed a pre-foreclosure action in March 2020 in New York State Supreme Court, 830083/2020.

Yimby reported last month that construction was stalled at the site for the 43-story, 50-unit tower.

In the court case, following the pre-foreclosure filing, Soho Properties filed a motion to dismiss the proceedings, but the judge ruled against the motion on October 3, 2022. Just over a month later, Soho Properties on November 4, 2022, filed a motion to appeal that decision.

On November 17, MSD Partners acquired the debt and stepped into the shoes of the prior lender, and continues to pursue a foreclosure on the property.

The property

The developer plans a tower with 50 residential units with 163,340 square feet of built space according to a PincusCo analysis of city data.

Development

On the tax lot, the most recent condominium plan was filed by PARK PLACE DEVELOPMENT PRIMARY LLC to create 50 residential units and 2 commercial units in a building at 45 Park Place in Financial District, Manhattan, called 45 Park Place Condominium that has a $447.6 million sellout, according to an March 25, 2015 submission to the New York State Attorney General. The principal of the sponsor, PARK PLACE DEVELOPMENT PRIMARY LLC, was Sharif El-Gamal.

Violations and lawsuits

The property was involved in several lawsuits including the foreclosure case and one involuntary bankruptcy over the past two years. The bankruptcy was filed on May 24, 2021, by contractors.

The neighborhood

In Financial District, The majority, or 75 percent of the 81.3 million square feet of commercial built space are office buildings, with elevator buildings next occupying 15 percent of the space. In sales, Financial District has the 7th highest sale turnover among other neighborhoods in the city with $2 billion in sales volume in the last two years. For development, Financial District is the 4th most active neighborhood among other neighborhoods. It had 9.3 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 two of the three commercial properties representing 759,152 square feet of the 922,492 square feet. The identified owner is Clipper Equity. On the tax block, there were two new building construction projects totaling 139,304 square feet. The largest is a 50-unit, 134,304 square-foot residential (R-2) building submitted by Soho Properties and filed by Sharif El-Gamal with plans filed May 5, 2014 and permitted December 3, 2015. The second largest is a 5,000 square-foot business (B) building submitted by Sharif El-Gamal with plans filed October 13, 2017 and it has not been permitted yet.

The surrounding

Within a 400-foot radius of 45 Park Place, PincusCo identified five commercial real estate items of interests occurred over the past 24 months. Of those five items, five were loans above $5 million totaling $398.3 million. The most recent of the five was Westfair Property Management in which borrowed $9 million from BCB Community Bank secured by the 12,300-square-foot, six-unit mixed-use building (S9) on 67 Murray Street on November 14, 2022.

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