Paramount Group sues to evict Rockpoint, Highgate from retail in Midtown West hotel, seeks $4M

Paramount Group, the office-building-focused real estate investment company, filed a suit yesterday seeking approximately $4.4 million from Rockpoint Group and Highgate Hotels, which are tenants of a retail condo Paramount owns in the 1,331-room hotel building at 700 Eighth Avenue, near Times Square in Manhattan. The suit seeks to evict them from the retail condo as well.
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Court filings represent the position of one party and are not necessarily accurate or complete.

The hotel, Row NYC, is currently closed, and the city chose it as a location to house immigrants sent by bus from Texas. The hotel unit, which is not involved in the Paramount action, is controlled by Rockpoint and Highgate, which are ground tenants to the fee landlord, David Werner. Werner is facing a $275 million pre-foreclosure actions from bondholders of the Morgan Stanley Bank of America Merrill Lynch Trust 2013-C9, which through its trustee Wells Fargo, initiated foreclosure action in state court in September, 653442/2022.

Paramount acquired the retail condo from Thor Equities after Thor was unable to sustain the $80 million in senior and mezzanine debt Paramount provided Thor. Thor turned over ownership to Paramount in March 2022, as PincusCo first reported at the time.

According to the complaint, the Paramount’s predecessor, “Ground leased a total of 9,408 rentable square feet in the Building..The Food Court Lease sets forth the monthly Fixed Rent during the following periods: (a) $53,161.49 from April 1, 2020 through and including March 2021; (b) $54,490.53 from April 1, 2021 through and including March 2022; and (c) $55,852.79 from April 1, 2022 through and including March 31, 2023… Because Ground breached the Food Court Lease, Landlord served upon Ground a Notice of Default, dated October 27, 2022, requiring Ground to cure its defaults under the Food Court Lease by paying the total amount of $1,678,222.41… As a result, Landlord served upon Ground a Notice of Intention to End Term of Lease dated November 22, 2022 (the “Food Court Termination Notice”), terminating the Food Court Lease effective December 9, 2022 (the “Termination Date”)… Accordingly, Ground owes at least the amount of $2,065,411.16 due under the Food Court Lease.

“Retail leased a total of 920 rentable square feet in the Building (“the Café Premises”) identified as “Retail 3” on the ground floor of the Building…As a result, Landlord served upon Retail a Notice of Intention to End Term of Lease dated November 22, 2022 (the “Café Termination Notice), terminating the Café Lease effective on the Termination Date… Accordingly, Retail owes at least the amount of $1,140,248.87 (the “Café Default Amount”) due under the Café Lease….

“Retail leased a total of 5,516 rentable square feet in the Building (the “Gym Premises”) known as “Hotel Gym/Retail 7… Landlord served upon Retail a Notice of Intention to End Term of Lease dated November 22, 2022 (the “Gym Termination Notice”), terminating the Gym Lease effective on the Termination Date… Accordingly, Retail owes at least the amount of $1,153,845.35 due under the Gym Lease.”

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