Aby Rosen and Chinatown Brasserie

The retail condominium that houses Chinatown Brasserie may be headed for an ownership battle now that Aby Rosen and Michael Fuchs’ troubled loan on the property is up for grabs. According to the Wall Street Journal, the $17.7 million loan, made in 2007 to the pair’s RFR Holdings and converted into commercial mortgage-backed securities, is backed by the retail condo at the landmark 380 Lafayette Street, where the upscale Chinatown Brasserie opened in 2006. [more]

From left: 246 Fifth Ave. and an example of structural damage there (inset), a vacant retail spot in the building

The owners of an over-leveraged and aging mixed-use building in the Flatiron District are in a rush to unload it as special servicer LNR Partners files to foreclose on the building’s defaulted $14.5 million loan and wipe out their equity, an industry source said.

The landlords of 246 Fifth Avenue, an L-shaped property on the southwest corner of 28th Street, bought it in July 2007 for $20 million, financed with a $14.5 million loan, city property records show. That loan went into default after the owners stopped making payments in March 2010, LNR’s lawsuit filed last month in New York State Supreme Court shows. Florida-based LNR is suing on behalf of investors in a package of commercial loans.

The property’s owners this past Friday hired David Schechtman, a senior director at Eastern Consolidated, to market the building. He declined to provide an asking price or additional comment. The owners and LNR did not immediately respond to requests for comment. [more]

The special servicer of the W New York-Union Square’s $115 million mortgage wants a bankruptcy judge to block a plan that would transfer ownership of the hotel to Host Hotels & Resorts, a publicly traded real estate investment trust. In court papers filed Monday, LNR said the mortgage debt holders it represents haven’t agreed to the plan because it would “clearly negatively impact the senior mortgage loan and run afoul of the senior mortgage loan documents,” the Wall Street Journal reported. The mortgage holder is concerned about liability releases granted under the plan and a proposed lease change. The plan also settles pending litigation involving the companies and their secured creditors. The U.S. Bankruptcy Court in Wilmington, Del., will consider confirming the plan at a hearing Friday. [WSJ]

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W New York – Union Square hotel

LEM Mezzanine, a Philadelphia-based private equity fund, acquired Istithmar’s former W New York – Union Square hotel for $2 million, plus the assumption of $212 million in debt, in a foreclosure auction held in Manhattan this morning, marking the first major asset to be sold since the November debt crisis emerged in Dubai. LEM bagged the troubled property at 201 Park Avenue South after a brief bidding war in which Istithmar officials tried to buy the 270-room hotel on the condition that they not have to assume the hotel’s October and November debt payments. Sources at the auction told The Real Deal that the hotel would continue to operate under the W brand, while LEM would make an undisclosed amount of capital improvements and position the hotel for an eventual recovery of the New York economy. “Despite the recent downturn of the hotel industry, and the defaults that led to today’s foreclosure auction, we are optimistic about the future,” LEM’s affiliate company said in a statement. [more]