The Real Deal New York

LNR files $53M LI office building foreclosure

July 29, 2011 03:40PM
By David Jones

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LNR Partners, the Miami Beach-based special servicer, has filed a foreclosure suit against Houlihan Parnes Realtors and CLK Properties, alleging the firms defaulted on $53 million in loans backed by a Long Island office property.

The suit, filed in New York state Supreme Court, alleges Houlihan and CLK defaulted on the loan in November 2010, by failing to make monthly debt service payments. The property is a 315,000-square-foot office building at One Old Country Road in Carle Place, N.Y.

The suit demands a judgment against the borrowers, the appointment of a receiver and that the landlord be forced to cover the deficiency remaining once the property is sold at auction.

According to the suit, Bank of America, the original lender, entered into a 2005 agreement to loan $53.28 million to an entity called Treeline 1 OCR. According to published reports and public records, Treeline Cos., a family-run Garden City, N.Y.-based firm led by Frances Schor, previously owned the office building since 1998.

The property, originally built in 1970, is located nearby the Roosevelt Field Mall and the Meadowbrook Parkway. In early 2005, Treeline completed an $8 million renovation of the building, which included new heating and air conditioning, new elevator cabs, an upgraded lobby and other improvements to the property.

By 2008, Treeline sold the property for $65 million to a joint venture that included White Plains, N.Y.-based Houlihan and Woodbury, N.Y.-based CLK, with Schor quoted as saying “the property fully matured and no longer fit our investment criteria.”

In a 2010 state Supreme Court lawsuit in Nassau County against attorneys Alexander Sklavos and Stuart Adler, the new landlords, CLK and Houlihan alleged that the law firm owed more than $800,000 in back rent and fees after defaulting on a five-year lease.

Adler, in court papers, alleged that the landlord agreed to modify the lease and let them rent out a smaller space. Sklavos was not immediately available for comment.

In March, Supreme Court Judge Denise Sher denied a motion for summary judgment and ordered that discovery begin for a trial.

According to the commercial real estate data firm LoopNet, asking rents at the space include up to 3,771 square feet at $27 a square foot.

In May, LNR filed suit to foreclose on CLK and Coolidge Equities on a $110 million loan backed by the Gateway at Lake Success, a 672,000-square-foot office complex. 

CLK and Houlihan have another loan that was transferred into special servicing at a 242,000-square-foot office complex at 300 Broadhollow Road in Melville, N.Y.  

CLK, Houlihan and LNR officials were not immediately available for comment. Lawyers for LNR did not return calls seeking comment.

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