Sugar Hill Capital loses 2 Harlem walkups with $3.9M loan to lender through foreclosure

The bondholders of the CMBS trust Series 2020-SB80 by special servicer CWCapital Asset Management through the entity 300 West 114th Street Holdings, LLC acquired through a judicial foreclosure from former owner Sugar Hill Capital Partners the nine-unit residential walkup building (C7) at 300 West 114th Street in Harlem, Manhattan and nine-unit residential walkup building (C7) at 2107 8th Avenue in Harlem, Manhattan. The expected use is cash flowing. The former debt was $3.9 million, and the transfer price was $3,310 based on an auction sale price of $1,000.
The deal closed on September 11, 2024 and was recorded on September 30, 2024. The two properties have 19,780 square feet of built space and 9,343 square feet of additional air rights for a total buildable of 29,118 square feet according to a PincusCo analysis of city data.
The signatory for Sugar Hill Capital Partners was Georgia Papazis. The contract date was August 28, 2024. This was foreclosure case 850012/2023. Georgia Papazis was referee.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 300 West 114th.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Series 2020-SB80 had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Sugar Hill Capital Partners purchased one property in one transaction for a total of $10 million and sold 22 properties in 22 transactions for a total of $77.1 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes Scott Castellano, head officer and Michael Feldman, site manager. The business entity is 300 West 114th Owner, Llc.

The property

The residential walkup building with 9 residential units in Harlem has 19,780 square feet of built space and 9,343 square feet of additional air rights for a total buildable of 29,118 square feet according to a PincusCo analysis of city data. The parcel has frontage of 25 feet and is 95 feet deep with a total lot size of 2,462 square feet. The zoning is R8A which allows for up to 6.02 times floor area ratio (FAR) for residential with inclusionary housing. The property has a J-51 exemption that started in 1992 and expires in 2026. The city-designated market value for the property in 2022 is $2 million. The property has 9 rent regulated units according to city tax records from 2022.

Violations and lawsuits

The properties were involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $3.9 million commercial foreclosure concerning a loan filed on January 6, 2023, by Series 2020-SB80 and CWCapital Asset Management against Sugar Hill Capital Partners, David Schwartz, Alex Friedman, Margaret Grossman, and Jeremy Salzberg. In addition, according to city public data, the properties have received two housing violations and $2,250 in OATH penalties in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The block

On the tax block of 300 West 114th, PincusCo has identified the owners of 19 of the 24 commercial properties representing 346,108 square feet of the 367,295 square feet. The largest owner is Sugar Hill Capital Partners, followed by Emerald Equity Group and then Selk Housing Development Fund Company Inc..
On the tax block, there were two new building construction projects totaling 13,121 square feet. The largest is a four-unit, 9,657 square-foot residential (R-2) building submitted by Jiren He and filed by Jiren He with plans filed December 14, 2021 and permitted April 21, 2022. The second largest is a seven-unit, 3,464 square-foot residential (R-2) building submitted by Rona Reodica with plans filed May 7, 2020 and it has not been permitted yet.

The majority, or 55 percent of the 367,295 square feet of built space are elevator buildings, with walkup buildings next occupying 45 percent of the space.

The seller

The PincusCo database currently indicates that Sugar Hill Capital Partners owned at least 79 commercial properties with 1,569 residential units in New York City with 1,486,593 square feet and a city-determined market value of $182.3 million. (Market value is typically about 50% of actual value.) The portfolio has $142.3 million in debt, with top three lenders as Signature Bank, Citibank, and New York Community Bank respectively. Within the portfolio, the bulk, or 55 percent of the 1,486,593 square feet of built space are walkup properties, with elevator properties next occupying 32 percent of the space. The bulk, or 69 percent of the built space, is in Manhattan, with Brooklyn next at 31 percent of the space.

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