NYC CRE bankruptcies rise 46% in 2023 to $2.1B

The dollar volume of New York City commercial real estate bankruptcy filings rose by 46 percent in 2023 to $2.1 billion compared to the prior year’s total of $1.4 billion, while the number of petitions more than doubled to 137 last year compared to 67 in 2022, according to a PincusCo analysis of court data.

Most bankruptcies are filed to block an impending foreclosure sale or some other event that would deprive the filer from ownership or control of the property, for example a contract vendee may file bankruptcy as a tactic to extend a closing date.

PincusCo analyzed bankruptcies filed for commercial properties with debt or a valuation in the petition of $1 million or more.

The top three bankruptcy actions filed last year were Soho Properties’ $306 million action related to Margaritaville Resort Times Square at 560 Seventh Avenue (Soho Properties actually filed twice in two months), Gregg Singer’s attempt to hold on to PS 64 in Alphabet City, valued at about $100 million, and Urban Realty Partners effort to hold on to a $96 million contract to buy the debt at 161 Maiden Lane.

The first two actions ended with a property sale later in the year, while the Urban Realty Partners action remains unresolved, according to a review of the bankruptcy case.

The most active month for bankruptcy filings last year was August, when debtors filed 17 petitions with a total value of $505 million.

Despite the increase, the volume declined in December 2023, compared with the previous month. Petitioners filed just six cases valued at $28 million last month, compared with 15 cases valued at $183 million in November 2023.