Rialto alleges $132.7M loan default at Brookfield Brooklyn Commons office tower

Rialto Capital Management as special servicer alleged in a pre-foreclosure action a maturity default in a loan with an outstanding principal of $132.7 million and secured by 115 Myrtle Avenue, formerly known as 15 MetroTech Center, in Brooklyn Commons in Downtown Brooklyn, owned by Brookfield Properties. Rialto filed the complaint August 21, 2025, in New York State Supreme Court in Brooklyn on behalf of Morgan Stanley Bank of America Merrill Lynch Trust 2013-C12, Commercial Mortgage Pass-Through Certificates, Series 2013-C12. The Brookfield-owned respondent is Forest City Myrtle Associates LLC. The lender is seeking to foreclose on the loan.
Case LINK

Court filings reflect the position of one party and are not necessarily accurate or complete.

The original loan amount was $170 million, provided in 2013 to Forest City Enterprises, with a maturity date of September 1, 2023.

According to the complaint, “The Borrower defaulted under the terms of the Loan Documents by failing to make the payment of all outstanding amounts owed under and in connection with the Loan on the Maturity Date, September 1, 2023…There is now justly due and owing to the Lender under the Notes, Mortgage, Loan Agreement and other Loan Documents the sum of at least $132,722,630.32, not including reserves, but including principal, interest, default interest, and other amounts…”

Brookfield acquired a controlling stake in this property, or 95 percent, valued at $200.48 million, on December 7, 2018, through its acquisition of Forest City Realty Trust. In 2021, the Commercial Observer reported Brookfield was renovating the building. In 2022, Brookfield renamed the MetroTech complex Brooklyn Commons.

The property

The office building in Downtown Brooklyn has 691,645 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 332 feet and is 150 feet deep with a total lot size of 42,709 square feet. The lot is irregular. The zoning is C6-1A which allows for up to 6 times floor area ratio (FAR) for commercial and up to 2.43 times FAR for residential. The city-designated market value for the property in 2022 is $132.7 million.

Prior sales and revenue

The 691,645-square-foot property generated revenue of $25.9 million or $37 per square foot, according to the most recent income and expense figures.

Development

Roberts Sana of FC Myrtle Associates LLC submitted a new building construction project for a educational (E) building at 15 Metrotech Center. The plan was filed on February 8, 2001 and was permitted on December 3, 2002. It calls for the construction of a 299-foot tall, 19-story building and was filed with the New York City Department of Buildings under job number 301130005.

For the tax lot building, it received its initial certificate of occupancy on April 11, 2022.

Violations and lawsuits

According to city public data, the property has received $3,275 in OATH penalties in the last year.

There were no lawsuits or bankruptcies filed against the property for the past 24 months.

The neighborhood

In Downtown Brooklyn, The bulk, or 40 percent of the 22.4 million square feet of commercial built space are office buildings, with elevator buildings next occupying 24 percent of the space. In sales, Downtown Brooklyn has near average sales volume among other neighborhoods with $398.9 million in sales volume in the last two years and is the 19th highest in Brooklyn. For development, Downtown Brooklyn has near average amount of major developments among other neighborhoods and is the 3rd highest in Brooklyn. It had 2.5 million square feet of commercial and multi-family construction under development in the last two years, which represents 11 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of three of the three commercial properties representing 1,110,595 square feet of the 1,110,595 square feet. The two identified owners are Brookfield Properties and New York University. There are no active new building construction projects on this tax block.

The owner

The PincusCo database currently indicates that Brookfield Properties owned at least 59 commercial properties with 5,732 residential units in New York City with 26,044,833 square feet and a city-determined market value of $5.8 billion. (Market value is typically about 50% of actual value.) The portfolio has $13.8 billion in debt, with top three lenders as Wells Fargo, Citibank, and JPMorgan Chase respectively. Within the portfolio, the bulk, or 58 percent of the 26,044,833 square feet of built space are office properties, with elevator properties next occupying 24 percent of the space. The bulk, or 70 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 327 Bridge Street, PincusCo identified one commercial real estate item of interests occurred over the past 24 months. It was a loan which Bolla Oil borrowed $27.7 million from Citizens Bank secured by the 3,900-square-foot, one-unit retail building (G4) on 160 Johnson Street and eight other properties on October 3, 2023.

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