The Real Deal New York

29 West 35th Street faces foreclosure

February 24, 2010 01:25PM
By David Jones

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CW Capital Asset Management has filed a foreclosure suit against investor Paul Sohayegh for allegedly defaulting on a $29.2 million mortgage loan at 29 West 35th Street, a 12-story office tower in the Garment District.

According to the lawsuit filed Feb. 4 in New York State Supreme Court, investors failed to repay the loan when it came due in August 2009.

In 2007, Twin Holdings of Delaware and Herald Square of Delaware, which operated under the name Empire State Equities, acquired the 78,000-square-foot building for $30 million from NTD Building, when the property was 75 percent vacant. Sohayegh, a Brookville, N.Y.-based investor and principal of Manhattan-based Bravo Management, guaranteed repayment of the loan, according to the complaint.

Manhattan-based commercial brokerage Berko & Associates represented the buyer and the seller in the deal.

In July 2007, the loan was transferred from CW Capital Mortgage Securities to Citigroup Financial Products, which in May 2008, turned around and transferred the loan back to CW Capital, the complaint says.

CW Capital then split off 20 percent of the loan, and sold that portion to Cadim Note, a Canadian lender.

An August 2008 listing had the landlord offering office space for $42 a square foot. The landlord was also offering retail space for either showrooms or medical offices.

Manhattan-based brokerage Newmark Knight Frank filed suit Feb. 2 in state Supreme Court, alleging that Empire failed to pay $320,000 in commissions. Newmark said it was named an exclusive broker to lease the ninth and 12th floors of the building, and signed leases with five commercial tenants, including HealthMatters Communications, ePrize, Pennoni Engineering and Surveying, Warrior Fitness Boot Camp and Gospel Music Channel.

Jones Lang LaSalle also placed a lien on the building, according to Propertyshark.com. Records show a July 2009 lien for $79,061 from Staubach, which is owned by JLL. A spokesperson for JLL said the company was looking into the matter.

Sohayegh was not immediately available for comment.

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