Vantage Properties and New Jersey-based Normandy Real Estate are facing a $37 million foreclosure suit from Dallas-based Lone Star Funds, for allegedly defaulting on a portfolio of four apartment buildings in upper Manhattan.
The loans were backed by rental buildings at 2 Pinehurst Avenue, 12 Pinehurst Avenue, 4101 Broadway and 4117 Broadway, that the developers originally acquired in 2007. Anglo Irish Bank, one of the largest and most active real estate lenders in Europe during the boom, made a $37 million loan to the developers and amended the loan in 2009, adding personal guarantees by top executives.
According to the complaint, filed March 2 in New York state Supreme Court, the borrowers failed to make monthly interest payments on the loan, between August 2010 and March 201. Following the default, the borrowers were ordered to pay net operating income directly to the bank, and failed to do so and by August 2011, the loan was accelerated.
Anglo put its entire $9.5 billion loan portfolio on the market last summer and by December 2011, closed a deal to sell the loan to Lone Star, which acquired a large portion of Anglo’s distressed real estate portfolio in the U.S.
As of January, the total balance due on the loan was $42.2 million, including principal, interest, fees and other expenses, according to the complaint. Lawyers for Loan Star have asked the court to put the properties up for sale to the highest bidder.
The lender has asked the court to name James Kuhn, president of Newmark Knight Frank, as the receiver for the properties.
Vantage, based in Long Island City, has struggled with some of its other Manhattan properties, including the 1,802-unit Savoy Park complex in Harlem.
A Lone Star spokesperson was not available for comment and nor were officials from Vantage, Normandy and NKF.