Santander files $43M pre-foreclosure at 126-unit A&E rental in Sutton Place

Santander Bank filed a pre-foreclosure action alleging a $43 million loan originated in 2020 and secured by a 126-unit rental building at 400 East 58th Street in Sutton Place, Manhattan, which is owned by A&E Real Estate Holdings, is in default. The bank filed the complaint in New York State Supreme Court in Manhattan, on Friday.
Court filings represent the position of one party and are not necessarily accurate or complete.
Case LINK

In a statement to PincusCo, a spokesperson for A&E said, “We were surprised to learn of Santander’s filing given that we had just spoken to the bank less than a week ago. During that meeting, we offered to pay off the entirety of our loan at par. We remain committed to working with the bank to resolve this issue quickly, amicably and in the best interest of the building and its residents.”
A&E Real Estate Holdings is one of the largest multifamily owners in the city. It is also making loans to other residential owners, through a lending arm.

A number of multifamily owners are battling lenders including Pinnacle Group.

A&E Real Estate Holdings, led by Douglas Eisenberg, bought the building in 2020 from SL Green Realty for $62 million.

In this pre-foreclosure action, Santander Bank alleges payment and other defaults. This month, the borrower is facing an interest rate reset from a fixed 3.5 percent to a floating rate that would now be about 6.35 percent.

According to the complaint, “Signature Bank (“Original Lender”) made a loan (the “Loan”) to Borrower in the original principal amount of Forty Three Million and 00/100 ($43,000,000.00) Dollars (the “Principal”) as evidenced by a Restated Note, dated as of September 9, 2020…Borrower defaulted upon its obligations under the Loan Documents, including by: (i) failing to make certain monthly interest payments; (ii) failing to make certain monthly tax escrow payments; and (iii) failing to make certain water and sewer payments…”

The alleged defaults began some time before February 14, 2025, when the bank sent a notice of default, however the exact dates of default are not laid out in the complaint or the February 2025 demand letter.

The property

The elevator building with 126 residential units in Sutton Place has 140,000 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 84 feet and is 122 feet deep with a total lot size of 11,147 square feet. The lot is irregular. The zoning is R10 which allows for up to 10 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $27.8 million. The most recent loan totaled $43 million and was provided by Signature Bank on September 9, 2020.

Prior sales and revenue

This property was sold by SL Green Realty for $62 million to A&E Real Estate Holdings on September 9, 2020.

The 140,000-square-foot property generated revenue of $5.4 million or $38 per square foot, according to the most recent income and expense figures.

Violations and lawsuits

According to city public data, the property has received one DOB violation, $6,250 in ECB penalties, 13 housing violations, and $16,600 in OATH penalties in the last year.

The neighborhood

In Sutton Place, The majority, or 70 percent of the 5.2 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 8 percent of the space. In sales, Sutton Place has near average sales volume among other neighborhoods with $105.5 million in sales volume in the last two years and is the 36th highest in Manhattan. For development, Sutton Place has near average amount of major developments among other neighborhoods and is the 40th highest in Manhattan. It had 142,369 square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of four of the 11 commercial properties representing 257,744 square feet of the 571,745 square feet. The largest owner is A&E Real Estate Holdings, followed by Lefrak and then Sol Goldman Investments. There are no active new building construction projects on this tax block.

The owner

The PincusCo database currently indicates that A&E Real Estate Holdings owned at least 177 commercial properties with 15,576 residential units in New York City with 14,459,508 square feet and a city-determined market value of $1.8 billion. (Market value is typically about 50% of actual value.) The portfolio has $2.9 billion in debt, with top three lenders as Signature Bank, JPMorgan Chase, and Mesa West Capital respectively. Within the portfolio, the bulk, or 76 percent of the 14,459,508 square feet of built space are elevator properties, with walkup properties next occupying 24 percent of the space. The bulk, or 49 percent of the built space, is in Queens, with Manhattan next at 32 percent of the space.

The owners according to the Department of Housing Preservation and Development includes Margaret Brunn, head officer and Adam Grushko, officer. The business entity is 400 East 58th Street Llc.

The surrounding

Within a 400-foot radius of 1064 1 Avenue, PincusCo identified five commercial real estate items of interests occurred over the past 24 months. Of those five items, three were sales above $5 million totaling $51.8 million. The most recent of the three was Rsr Investments Ltd. which bought one condo unit in the zero-square-foot, 121-unit condo building (R4) on 430 East 58th St for $14.5 million from Sutton 58 Holding Company LLC on March 17, 2025. Of those five items, two were loans above $5 million totaling $28.9 million. The most recent of the two was LeFrak in which borrowed $23 million from Equitable Financial Life Insurance Company secured by the 105,734-square-foot, 125-unit hotel (HS) on 410 East 58th Street on August 23, 2024.

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