Pre-foreclosure filed for $55M FiDi loan given to now-shuttered college

The trustee for a securitized loan with an original principal of $55 million filed a pre-foreclosure action seeking the sale of a 150,000-square-foot dormitory condominium unit at 2 Washington Street in the Financial District of Manhattan.

Alliance University, the new identity for a 140-year-old institutional formerly known as Nyack College, after losing its accreditation, closed in August 2023, according to news reports. Since July 2023, the school had not made debt payment.

Nyack College was started in Manhattan as an education institution founded by the Christian and Missionary Alliance. It purchased the 150,000-square-foot condominium unit at 2 Washington Street from the Moinian Group in 2016 for $49.2 million.

According to the complaint, “Borrower has failed to comply with the terms and provisions of the Loan Documents by its, among other things, failure to pay the amounts due under the Loan Documents when due, failing to pay certain common charges to the Condominium when due, and the ceasing of operation of the Mortgaged Premises as NYACK College… As of the date hereof, the total outstanding principal balance is $50,681,435.93. This amount does not include accrued interest, late charges, default interest, special servicing fees, [etc.]… Upon information and belief, Guarantor has breached Sections 6(b) and (c) of the Guaranty by its (i) execution of that certain lease agreement with Bay Street Associates, LLC, dated on or about January 2020, for approximately 150,000 rentable square feet to be used for student housing (the “Bay Street Premises”), for a thirty year term with an initial annual rent of $3,486,578 with yearly escalations for a total rental value of $132,309,478; and (ii) transfer to Bay Street Associates, LLC on or about September 5. 2023, of all furniture, fixtures, and equipment at the Bay Street Premises.”

According to the notice of default, “Borrower’s failure to timely and properly pay all amounts required by the Loan Documents, including but not limited to: (i) the Monthly Debt Service Payment Amount (as defined in the Loan Documents) since July 5, 2023; (ii) certain common charges to The 17 Battery Place Condominium (the “Condominium”) as detailed in that certain Notice to Borrower from the Board of Managers of the Condominium, dated September 8, 2023; and (iii) the ceasing of operation of the Property as NYACK College.”

Correction: A prior version of this post incorrectly provided the address as 17 Battery Place as well as an image of 17 Battery Place. The correct address is 2 Washington Street, and the image has been changed to 2 Washington Street.

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