[Updated at 10.20 a.m.] Gary Barnett’s Extell Development has defaulted on a $375 million building loan for the Upper West Side’s 213-unit Belnord rental building, according to June servicer data from Trepp. The loan on the building, at 225 West 86th Street, between Broadway and Amsterdam avenues, is now 30 days delinquent.
This development is surprising, Trepp said, as there is still more than $12 million in the loan’s debt service reserve, though the loan has been on Trepp’s watchlist since 2007. Barnett declined to comment.
The Belnord ran into difficulties when a New York State Supreme Court ruled that it was not permitted to increase rents on rent-controlled or rent-stabilized units because the property had received a J-51 tax abatement from the city.
Extell, then known as Intell Management and Investment, purchased the building in 1994. The purchase was made with a group of investors including Ziel Feldman of Property Markets Group, which is no longer involved. The property has since been renovated.
Trepp compared this to the Riverton default in 2008, which it says marked the beginning of the end for CMBS 1.0. — Katherine Clarke