Multiple Lower Manhattan Buildings Veering Toward Foreclosure and Auctions
If you had a thousand dollars to spare last week, you might have been able to pick up 50-story, 300,000 square-foot office building in the Financial District. That was the winning (and only) bid at a foreclosure auction for 30 Broad Street, a 1932 commercial tower located at the corner of Exchange Place.
Even as office leasing rebounds in Lower Manhattan, a number of prominent local buildings have gone into foreclosure, while others are approaching this status (through a process that lenders call “special servicing”), and still more have narrowly averted being seized by lenders, at least for the time being.
The tower at 30 Broad is familiar to Lower Manhattan residents as the location of a New York Sports Club fitness center for more than a decade, before this facility was taken over by the Complete Playground indoor play space. The building also houses a Serafina restaurant at its base. In a story first reported by Crain’s, InterVest, the lender holding a $117 million mortgage on 30 Broad, moved last autumn to begin foreclosure proceedings against borrower and building owner Tribeca Investment Group, which purchased the structure in 2016 for $130 million. This means that the lender, for $1,000, seized control of the building for a 99.93 percent discount below the price it fetched nine years ago.
Nor is 30 Broad Street alone. Steps away, the historic American Banknote Building (at 70 Broad Street, on the corner of Beaver Street) was sold for $20 million at a foreclosure auction in March, after the owners tried to over the course of several years to sell it for $88 million, even as they fell behind on mortgage payments.
Elsewhere in Lower Manhattan, a single storefront at 170 Broadway (the commercial condominium that houses the Gap), which fetched $70 million in 2014, is now in special servicing as the developer who bought it more than a decade ago has defaulted on the mortgage, according to lenders. Also in special servicing is the 23-story office tower at One Whitehall Street, as lenders allege owners have stopped making payments on its $156 million debt. And federal regulators charge that developer Moinian is in breach of a $78 million mortgage for the residential rental building at 90 Washington Street (at the corner of Rector Street), signaling that foreclosure proceedings may begin soon.
Somewhat luckier are the owners of the office building at 25 Broadway, which carries a mortgage of $243 million, but defaulted on that note last year. This nearly led to foreclosure, but negotiations with creditors subsequently extended the term of the mortgage through at least July of next year. Since then, the owners appear to have remained current on the revised terms of the loan, but KBRA (a credit ratings firm that specializes in real estate debt) estimates that the building’s value has declined from $369 million when the loan was issued, to $284 million last July, to a “liquidation value” of $170 million today.