Pre-foreclosure filed at Brookfield’s One Pierrepont with $127.9M loan

A special servicer filed a pre-foreclosure action claiming a loan with an original principal of $127.9 million that is secured by Brookfield Properties’ office building at One Pierrepont Plaza at 300 Cadman Plaza West, was in a maturity default. The special servicer for the securitized trust Series 2019-CORE, CWCapital Asset Management, filed the action in New York State Supreme Court in Brooklyn on November 15, 2024.

Case 531027/2024 LINK

The $127.9 million loan was one of several nationally that at the time of origination in 2018 totaled $405 million. Of the original total of 12 borrower entities, only four remain, and the only one of those four in New York City that remains is this One Pierrepont loan.

On December 7, 2018, Barclays, CitiBank, Bank of America and Deutsche Bank made the $405 million loan to Forest City Realty Trust. On the same day, Forest City Realty Trust sold itself to Brookfield Asset Management.

According to the complaint, “The Loan was originally evidenced by four promissory notes, each dated as of December 7, 2018: (i) Promissory Note A-1 in the amount of $121,500,000.00; (ii) Promissory Note A-2 in the amount of $121,500,000.00; (iii) Promissory Note A-3 in the amount of $81,000,000.00; and (iv) Promissory Note A-4 in the amount of $81,000,000.00… The Initial Maturity Date of the Loan was identified as December 9, 2020. Section 2.9 of the Loan Agreement provides for up to three (3) successive extensions of one (1) year each of the maturity date of the Loan. Borrower exercised its extension options and extended the maturity date of the Loan to December 9, 2023. Borrower failed to repay the Loan in full by the extended maturity date of December 9, 2023.”

The property

The office building in Brooklyn Heights has 725,991 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 67 feet and is 285 feet deep with a total lot size of 45,780 square feet. The lot is irregular. The zoning is C6-4 which allows for up to 10 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $153.1 million.

Violations and lawsuits

According to city public data, the property has received one DOB violation and $7,800 in OATH penalties in the last year.

The property was involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $128 million commercial foreclosure concerning a loan filed on November 15, 2024, by Series 2019-CORE and CWCapital Asset Management against Brookfield Asset Management.

The neighborhood

In Brooklyn Heights, The bulk, or 26 percent of the 12.1 million square feet of commercial built space are office buildings, with elevator buildings next occupying 23 percent of the space. In sales, Brooklyn Heights has near average sales volume among other neighborhoods with $759.8 million in sales volume in the last two years and is the 3rd highest in Brooklyn. For development, Brooklyn Heights has near average amount of major developments among other neighborhoods and is the 13th highest in Brooklyn. It had 1.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 10 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of one of the two commercial properties representing 725,991 square feet of the 753,671 square feet. The identified owner is Brookfield Properties. On the tax block, there was one new building construction project filed totaling 294,379 square feet. It is a 134-unit, 294,379 square-foot residential (R-2) building submitted by Hudson Companies and filed by Sally Gilliland with plans filed January 18, 2016 and permitted July 20, 2017.

The owner

The PincusCo database currently indicates that Brookfield Properties owned at least 57 commercial properties with 4,799 residential units in New York City with 25,030,096 square feet and a city-determined market value of $5.7 billion. (Market value is typically about 50% of actual value.) The portfolio has $11.7 billion in debt, with top three lenders as Wells Fargo, JPMorgan Chase, and Morgan Stanley respectively. Within the portfolio, the bulk, or 60 percent of the 25,030,096 square feet of built space are office properties, with elevator properties next occupying 20 percent of the space. The bulk, or 72 percent of the built space, is in Manhattan, with Brooklyn next at 21 percent of the space.

The surrounding

Within a 400-foot radius of 1 Pierrepont Plaza, PincusCo identified two commercial real estate items of interests occurred over the past 24 months. One of those two items was a sale which 126 Pierrepont LLC bought the 5,599-square-foot, three-unit co-op (C6) on 126 Pierrepont Street for $12.5 million from 126 Pierrepont Street, LLC on May 16, 2024. One of those two items was a loan which Jonathan Rose Companies borrowed $11.4 million from Valley National Bank secured by the 31,059-square-foot, one-unit retail building (K7) on 181 Montague Street and one other property on September 7, 2023.

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