NYC pre-foreclosure roundup: $25M office building in Staten Island, $5M mixed-use in Flushing
1150 South Avenue (Credit - Google)
A special servicer filed a $25 million pre-foreclosure action against the owner of a Staten Island office building developed by the late George Kaye, a well-known candy manufacturer. In another filing, Maverick Real Estate Partners filed a $5 million pre-foreclosure action, related to the remaining debt from a larger loan originated in 2020 and secured by mixed-use buildings in Flushing, Queens.
$25M pre-foreclosure filed, loan secured by Staten Island office building: The special servicer for a $25 million loan secured by the 206,618-square-foot office complex at 1150 South Avenue in Bloomfield, Staten Island, alleges the loan is in default.
The late candy manufacturer George Kaye, also known as George Katsoris, built the building and was the guarantor. He died in 2015, and no new guarantor has been added.
Court filings represent the positions of one party and are not necessarily accurate or complete.
According to the complaint, “On or about September 25, 2014, Barclays Bank… loaned Borrower the principal amount of [$25 million]… More than thirty (30) days have passed since Guarantor’s death on October 30, 2015, and Borrower has still failed in its obligation to provide a replacement guarantor acceptable to Lender. Accordingly, an Event of Default has occurred and is continuing under the Loan Documents as a result of, inter alia, the failure to replace Guarantor. [In addition], borrower failed to timely pay the Rollover Reserve Deposit due on the February 6, 2022 Monthly Payment Date and on each Monthly Payment Date thereafter (the “Payment Defaults”). Accordingly, an Event of Default has occurred under the Loan Documents as a result of, inter alia, the Payment Defaults.
“By notices dated December 12, 2022 (the “Demand for Compliance”) and January 5, 2023 (the “Notice of Acceleration” together, the “Notices”), Plaintiff notified Borrower that, as a result of Borrower’s failure to cure the Event of Default, Plaintiff declared the entire debt immediately due and payable and demanded immediate payment in full of the entire Total Indebtedness. As a result of the foregoing, there is now due, owing and payable to Plaintiff under the Loan Documents: (i) $25,000,000.00 in principal; (ii) accrued and unpaid interest at the Interest Rate and Default Rate; (iii) Late Charges; (iv) attorneys’ fees, costs and expenses; (v) Prepayment Premium; and (vi) all other sums provided for under the Loan Documents. LINK
The office building in Bloomfield has 206,618 square feet of built space and 370,608 square feet of additional air rights for a total buildable of 579,075 square feet according to a PincusCo analysis of city data. The parcel has frontage of 760 feet and is 949 feet deep with a total lot size of 579,075 square feet. The lot is irregular. The zoning is M1-1 which allows for up to 1 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $25.2 million.
Prior sales and revenue
The 206,618-square-foot property generated revenue of $5.8 million or $28 per square foot, according to the most recent income and expense figures.
Development
George Kaye of Southport, L.L.C. submitted a new building construction project for a business (B-1) building at 1150 South Avenue. The plan was filed on July 21, 2000 and was permitted on August 15, 2001. It calls for the construction of a 67-foot tall, four-story building and was filed with the New York City Department of Buildings under job number 500437324.
Maverick files $5M pre-foreclosure against Flushing properties: Maverick Real Estate Partners filed a pre-foreclosure action against entities affiliated with J&C International Group, which owns four properties in Flushing, which originally borrowed $15.7 million in 2020 from Barclays. The properties were previously owned by Bo Jin Zhu who lost them in a bankruptcy filing to J&C International Group in 2020. Maverick bought the remaining debt, now totaling $5 million, in October 2022. According to property records, on September 14, 2020, the owner entities represented by J&C International Group borrowed $15.7 million from Castellan Capital secured by 41-31 Haight Street, 41-27 Haight Street, 41-23 Haight Street, 41-19 Haight Street and several additional properties. The additional properties were released in several filings in 2022.
According to the complaint,”The Loan matured on October 1, 2022, and has not been extended pursuant to the terms and conditions set forth in the Loan Documents, if any.” The complaint also alleges unauthorized transfers of title of some of the properties. LINK
Direct link to the property’s ACRIS page and link to DOB NOW portal.