Veracity Equities set to lose 3 Nolita rentals with $41M loan

A federal judge sided with the special servicer of a $41 million loan secured by Veracity Equities’ three Nolita rental properties at 31 Prince Street, 46 Spring Street and 48 Spring Street, issuing a ruling yesterday approving summary judgment in a motion to foreclose on the debt and sell the properties at auction.
Veracity Equities faces four other pre-foreclosure actions, but this is the first where a judge approved a foreclosure.
Rialto Capital Advisors filed the pre-foreclosure action in U.S. District Court in Manhattan (1:22-cv-05855-JGK) on July 8, 2022. In the ruling yesterday, the judge John Koeltl, allowed Rialto to pursue potential deficiencies through a guaranty given by Ronald Li if the auction price did not cover the entire unpaid debt.

There are at least five foreclosure actions lenders have filed since 2021 against nine Veracity Equities’ properties with a total of $125 million in original principal. This is the first in which the judge has approved a foreclosure auction.

In the $24 million 850275/2021 153 Elizabeth Street foreclosure, the judge appointed a receiver in February 2023. In the $21 million 850100/2022 199 Lafayette Street action the judge appointed a receiver May 2022. In the $32 million 1:22-cv-05586-PAE 26 Prince Street, 29 Prince Street, 137 Thompson Street action, the parties are deadlocked in negotiations, and in the most recent filing, for $5.65 million 850031/2023 at 111 Mercer Street, only a lis pendens has been filed.

The walkup building at 31 Prince Street with 16 residential units in Nolita has 12,025 square feet of built space and 972 square feet of additional air rights for a total buildable of 13,003 square feet according to a PincusCo analysis of city data. The parcel has frontage of 27 feet and is 79 feet deep with a total lot size of 2,160 square feet. The lot is irregular. The zoning is C6-2 which allows for up to 6 times floor area ratio (FAR) for commercial and up to 6.02 times FAR for residential. The city-designated market value for the property in 2022 is $9.6 million.

The walkup building at 48 Spring Street with 16 residential units in Nolita has 12,025 square feet of built space and 2,483 square feet of additional air rights for a total buildable of 14,514 square feet according to a PincusCo analysis of city data. The parcel has frontage of 25 feet and is 93 feet deep with a total lot size of 2,411 square feet. The lot is irregular. The zoning is C6-2 which allows for up to 6 times floor area ratio (FAR) for commercial and up to 6.02 times FAR for residential. The city-designated market value for the property in 2022 is $8.3 million.

The walkup building at 46 Prince Street with 15 residential units in Nolita has 9,436 square feet of built space and 1,385 square feet of additional air rights for a total buildable of 10,829 square feet according to a PincusCo analysis of city data. The parcel has frontage of 25 feet and is 75 feet deep with a total lot size of 1,799 square feet. The lot is irregular. The zoning is C6-2 which allows for up to 6 times floor area ratio (FAR) for commercial and up to 6.02 times FAR for residential. The city-designated market value for the property in 2022 is $7.3 million.

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