Note buyer files $14.9M pre-foreclosure at Little Italy office

An affiliate of real estate investment firm 7G Group, the entity 7G 123 Lafayette LLC, filed a $14.9 million pre-foreclosure action at the five-story office building at 123 Lafayette Street in Little Italy, Manhattan, yesterday in New York State Supreme Court. An affiliate of First Atlantic Capital bought the building in 2016 for $33.5 million from Stellar Management.

Signature Bank provided a $16 million loan on January 12, 2016, for that acquisition. That loan was restated in 2021 at $14.88 million. The loan matured in early 2023 and was not paid, according to the complaint, which was signed by 7G Group’s Jonathan Krasner.

Court filings represent the position of one party and are not necessarily accurate or complete.

Case LINK

Blackstone Group, after acquiring loans from the insolvent bank, sold this loan to 7G Group, also known as 7G Realty on July 24, 2024.

According to the complaint, “Under a Loan Purchase and Sale Agreement dated July 1, 2024, SIG CRE 2023 Venture LLC sold, transferred, assigned, and conveyed to Plaintiff…Borrower defaulted under the terms of the Loan and the Loan Documents by failing to remit payment of all sums due on the February 1, 2023 payment date (the “Maturity Date”) under the Restated Note.  Accordingly, an Event of Default has occurred, and is continuing, under Section 2.1.1 of the Mortgage since February 1, 2023 as a result of Borrower’s failure to remit the amounts due and payable under the Restated Note on the Maturity Date.  By Notice dated February 26, 2024 (the “Notice of Maturity Default”), Plaintiff’s predecessor-in-interest, SIG CRE 2023 Venture LLC, notified Borrower that an Event of Default… By Restated Mortgage Note dated February 1, 2021 (the “Restated Note”), Borrower promised to pay Original Lender the sum of $14,885,494. ”

The property

The office building in Little Italy has 17,260 square feet of built space and 15,005 square feet of additional air rights for a total buildable of 32,270 square feet according to a PincusCo analysis of city data. The parcel has frontage of 62 feet and is 51 feet deep with a total lot size of 3,227 square feet. 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 $10.2 million.

Prior sales and revenue

This property was sold for $33.5 million on January 12, 2016.

The 17,260-square-foot property generated revenue of $1.5 million or $86 per square foot, according to the most recent income and expense figures.

Development

For the tax lot building, it received its initial certificate of occupancy on September 13, 2016.

Violations and lawsuits

According to city public data, the property has received $8,650 in ECB penalties and $10,225 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 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 $211.2 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 38th highest in Manhattan. It had 223,517 square feet of commercial and multi-family construction under development in the last two years, which represents 5 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of one of the five commercial properties representing 17,260 square feet of the 86,160 square feet. The identified owner is First Atlantic Capital. There are no active new building construction projects on this tax block.

The owner

The PincusCo database currently indicates that First Atlantic Capital owned at least one commercial property in New York City with 17,260 square feet and a city-determined market value of $10.2 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single office property. It is located in Manhattan.

The surrounding

Within a 400-foot radius of 123 Lafayette Street, PincusCo identified four commercial real estate items of interests occurred over the past 24 months. One of those four items was a sale which Museum of Chinese in America bought the 46,700-square-foot, 12-unit office building (O5) on 211 Centre Street for $51.1 million from Larry Goodman on January 11, 2024. Of those four items, three were loans above $5 million totaling $34 million. The most recent of the three was Javeri Capital in which borrowed $13 million from Bank of Montreal secured by the 4,900-square-foot, two-unit mixed-use building (K4) on 33 Howard Street and one other property on June 27, 2024.

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