Rialto files $89.5M pre-foreclosure at Hell’s Kitchen multifamily portfolio

Rialto Capital Management filed a pre-foreclosure action alleging an $89.5 million loan secured by a portfolio of Hell’s Kitchen multifamily buildings owned by PH Realty Capital and other investors, and originated in 2022. was in default. The lender filed the complaint in New York State Supreme Court in Manhattan on November 25, 2025. The portfolio of 13 properties includes  448-452 West 57th Street, 406 West 56th Street, 418 West 56th Street, 404 West 56th Street and 309 West 54th Street.

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

According to the complaint, “the Notes matured on June 9, 2025 and have not been paid in part or in whole by the Borrowers or any other party… Borrower failed to pay to Lender the full Monthly Debt Service Payment Amount owed on the Payment Dates occurring on December 9, 2024 and January 9, 2025…” as well as for other items.

Borrowers large and small have been challenged by a higher borrowing rate and a reduction of asset values in many asset classes. The number of pre-foreclosure actions shot up in November to more than $1 billion in at least 74 filings alleging defaults in loans with original principals of $1 million and up. That was the fourth highest total in at least two years, according to PincusCo data.

Case LINK

In the 2022 loan, PH Realty Capital through the entity 309w54 Owner LLC as borrower signed a refi loan with lender Rialto Capital Management through the entity Fs Creit Originator LLC valued at $89.5 million for 13 residential walkup properties including the midblock 45-unit residential walkup building at 448-452 West 57th Street in Hell’s Kitchen, Manhattan, midblock 40-unit residential walkup building at 418 West 56th Street in Hell’s Kitchen, Manhattan, and midblock 24-unit residential walkup building at 404 West 56th Street in Hell’s Kitchen, Manhattan.
The deal closed on May 13, 2022 and was recorded on June 6, 2022. The prior lender was Bethpage Federal Credit Union which held debt that had an original loan amount of $62.2 million.The 13 properties have 181,559 square feet of built space and 98,062 square feet of additional air rights for a total buildable of 279,701 square feet according to PincusCo analysis of city data. The loan price per built square foot is $492 and the price per buildable square foot is $319 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The signatory for PH Realty Capital was Peter Hungerford. The signatory for Rialto Capital Management was Liat Heller. Peter Hungerford is the founder of PH Realty Capital.

Direct link to Acris document. link