Thor loses two-story SoHo retail to lender in $8M foreclosure auction

The bondholders of the securitized trust Series 2013-C7 through special servicer Midland Loan Services acquired through a judicial foreclosure the retail building (K2) at 440 Broadway in SoHo, Manhattan. The expected use is cash flowing. The former owner was Thor Equities, led by Joseph Sitt. The auction price was $8 million.
Thor Equities bought the property for $12 million in January 2008 and borrowed $13.25 million against the building in 2012.
The transfer closed on August 14, 2024 and was recorded on August 16, 2024. The property has 5,771 square feet of built space and 9,176 square feet of additional air rights for a total buildable of 14,945 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $1,386 and the price per buildable square foot is $535 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 seller bought the property on January 23, 2008, for $12 million. The signatory for Thor Equities was Clark Whitsett. The signatory for Series 2013-C7 and Midland Loan Services was Andrea Helm. The auction date and contract date was July 17, 2024. PincusCo reported in June that the property was set for auction in July. In this action, the trustee for the CMBS bondholders is taking the property back from Thor Equities. Even as Thor lost this property, it closed on a Brooklyn purchase recently for $58.5 million. Clark Whitsett was the referee for case 850241/2023. The top bid was $8 million.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Series 2013-C7 had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Thor Equities purchased two properties in two transactions for a total of $66.6 million and sold or turned over 10 properties in seven transactions for a total of $303.7 million over the same time period.

The property

The retail building in SoHo has 5,771 square feet of built space and 9,176 square feet of additional air rights for a total buildable of 14,945 square feet according to a PincusCo analysis of city data. The parcel has frontage of 30 feet and is 98 feet deep with a total lot size of 2,989 square feet. The property is in the SoHo-Cast Iron Historic District. The city-designated market value for the property in 2022 is $8.2 million.

Violations and lawsuits

The property was involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $13.2 million commercial foreclosure concerning a loan filed on April 13, 2023, by Morgan Stanley Bank of America Merrill Lynch Trust 2013-C7 against Thor Equities and Joseph Sitt. In addition, according to city public data, the property has received $600 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on August 28, 2014. 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 this tax block, PincusCo has identified the owners of four of the 11 commercial properties representing 122,499 square feet of the 230,963 square feet. The largest owner is Tokyo Trust Capital, followed by Spear Street Capital and then Kpg Funds.
There are no active new building construction projects on this tax block.

The majority, or 67 percent of the 230,963 square feet of built space are office buildings, with retail buildings next occupying 21 percent of the space.

The seller

The PincusCo database currently indicates that Thor Equities owned at least 24 commercial properties with 349 residential units in New York City with 836,714 square feet and a city-determined market value of $200.4 million. (Market value is typically about 50% of actual value.) The portfolio has $306.8 million in debt, with top three lenders as MetLife, Athene Holding, and Prime Finance respectively. Within the portfolio, the bulk, or 47 percent of the 836,714 square feet of built space are elevator properties, with industrial properties next occupying 18 percent of the space. The bulk, or 58 percent of the built space, is in Manhattan, with Brooklyn next at 42 percent of the space.

The buyer

The PincusCo database currently indicates that Midland Loan Services owned at least one commercial property in New York City with 229,926 square feet and a city-determined market value of $35.5 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single office property. It is located in Brooklyn.

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