The Real Deal New York

Defaulted mortgage on Gurevich’s Brooklyn development site to hit market

April 17, 2012 01:30PM
By Katherine Clarke

David Schechtman of Eastern Consolidated and 2300 Cropsey Avenue

A Swedish bank that holds dozens of former Lehman Brothers Holdings notes has retained commercial brokerage Eastern Consolidated to market the defaulted mortgage on a prospective Brooklyn development site owned by developer Alexander Gurevich, Eastern broker David Schectman, who is handling the listing, confirmed to The Real Deal today.

The 45,688-square-foot site, at 2300 Cropsey Avenue, has been owned by Gurevich, the Russian developer banned by Governor Cuomo in 2010 from selling condominium and cooperative units in New York state, since 2007. It currently houses an 85,000-square-foot structure with a demolished interior. The structure can be destroyed and replaced with a new property of up to 275,000 square feet, according to zoning regulations.

Gurevich had at one time planned to build a 30-story, multi-use building with 264 apartments, 81,378 square feet of community facilities and an underground parking garage at the site, according to previous reports. Those plans never materialized. Following the developer’s default on the loan held by Swedbank, a summary judgment was granted against the Gravesend property last November, public records show. The unpaid principal balance of the defaulted mortgage is $17.03 million, records show, but sources said the amount would be closer to $20 million once penalties and fees are added.

The defaulted mortgage, once held by Lehman Brothers, is likely to trade for $12 million or $13 million, sources said, a discount from the $17 million unpaid principal. Bids are expected to be submitted by May 18.

Gurevich is also marketing the site for sale independently with Massey Knakal Realty Services. Massey Knakal declined to comment. The listing does not have an asking price attached, according an offering plan found on the Massey Knakal website.

This is not the only former Lehman Brothers note held by Swedbank. In September 2008, Swedbank took over 69 Lehman Brothers loans secured by 55 properties valued in March at $1.35 billion, The Real Deal previously reported.

Neither Swedbank nor Gurevich was immediately available for comment. Gurevich was banned from selling residential real estate for three years in 2010 over allegations that he failed to disclose key information about the principal investors to prospective buyers at the Alexander condominium in Midtown East.

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