After settling a two-year-old bankruptcy case at 20 Bayard in Williamsburg, senior lender W Financial Fund has sold the unsold shares, which include 37 vacant apartments, to Brooklyn investment firm Fortis Property Group for $25 million, according to the lender.
After settling the bankruptcy case with developer Isaac Hager, president of North Development Group, the lender was planning to take over the project, but was blown away by an unsolicited offer from Fortis.
“The idea was that we would own the remaining apartments,” W Financial President Gregg Winter said. “At last second as we were preparing to close a week and a half ago, we were approached by [Fortis], [who was] fervently interested in buying our interest.”
As The Real Deal first reported, developer Isaac Hagar threw the 64-unit condo into bankruptcy protection in December 2009, after he was unable to refinance a $17.4 million loan balance or make monthly interest payments of $170,000.
Court records show the developers had assets of $21 million, including 37 condo units and 40 parking spaces, as well as $18 million in liabilities.
The property was one of three Karl Fischer-designed condos on the street overlooking McCarren Park. The property was considered one of the more ambitious projects in Williamsburg, with interiors designed by Andres Escobar, who designed William Beaver House in the Financial District. The other two projects were the Aurora at 30 Bayard Street and the Icon at 50 Bayard Street
Prices at 20 Bayard averaged $820 a square foot, according to Streeteasy.com records, and the developers were able to sell 25 units between 2007 and 2009, when they defaulted on the debt. The brokers hired Prudential Douglas Elliman to take over sales at the property, and urged to slash prices at the building, but refused. They then rented out the remaining units.
Winter said that he expected W Financial would remain in control of the unsold shares at this property for the next five years, but the offer from Fortis was so much higher than the loan balance, that the offer spoke for itself.
Over the past couple of years, a few changes have taken place at the property, including the hiring of Manhattan-based Midboro Management to oversee the condo. Winter said the 25 existing unit owners appear to be happy with the progress being made at the property.
“They really enjoy living in the building,” he said.
The new owners will have to submit an amendment to the attorney general before they can start selling again, which will take a few months.
Lawyers for the developers were not immediately available for comment. Michael Wolfe, president of Midboro, said he needed to consult with the new owners before making any comment.