Kent Swig and 80 Broad Street

The defaulted $75 million senior mortgage loan on Kent Swig’s 80 Broad Street is officially up for sale through Cushman & Wakefield, confirming rumors that surfaced last month and setting the stage for a potential takeover from a buyer, the Post reported. Last year, the loan was transferred to special servicer J.E. Robert Company after it was determined to be in “imminent default” by Fitch Ratings. While Swig’s loan payments are still current, the tower is still in “covenant default.” According to Real Capital Analytics’ Dan Fasulo, Swig would “have to work magic to keep this one” because whoever buys the senior mortgage will likely be looking to wrest control of the building. … [more]

Michael Wainstein of Private Capital Group, Rabbi Shmuel Butman, New York City Comptroller John Liu and developer Kent Swig

Embattled developer Kent Swig recently told The Real Deal that he hasn’t lost as much gelt as everyone thinks. Sheffield57 was actually “the best, most successful deal I have ever done in my life,” he said. When will Swig spin the dreidel next? Read “Swig: I was the fall guy” in the December issue to be enlightened.

At left, Swig poses after lighting the world’s largest menorah last week in Central Park, near the Plaza Hotel. The Real Deal’s own Michael Stoler lit the Central Park menorah Monday. TRD

From left: Sierra’s Peter Braus, Kent Swig, 140 William Street (building photo source: PropertyShark)

A seven-story, roughly 40,000-square-foot vacant commercial building at 140 William Street once owned by real estate developer Kent Swig has begun seeking tenants for the first time since it changed hands, after sitting vacant for “several years,” according to Sierra Realty, the exclusive leasing brokerage for the Financial District property. The building, which Swig sold at a 53 percent loss in July when investor Chris Soukas snapped it up for $11.35 million, according to public records. … [more]

80 Broad Street and Kent Swig

Financial firm Faunus Group International has signed an 11-year, 18,000-square-foot lease at embattled developer Kent Swig’s 80 Broad Street, a property Swig Equities was in danger of losing in July, the Observer reported. Faunus previously occupied 6,600 square feet on the 22nd floor of the downtown building, but it will now take over the entire 22nd and 34th floors, tripling its space there. Asking rents in the building are around $32 a square foot. “We are thrilled with the confidence shown in 80 Broad and Swig Equities by FGI,” Swig said in a statement. “We welcome its continued and expanded presence within our building.” Over the summer, one of Swig’s lenders foreclosed on the property after he defaulted on a $12 million loan. But the developer is holding on to the building, which he acquired for $70 million. Swig is said to owe as much as $50 million to various creditors, with past
rumors suggesting that he was threatening to file for bankruptcy. In the summer, The Real Deal reported that Swig had unloaded 140 William Street for $11.5 million, at a 53 percent loss.  [NYO]

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Kent Swig

Turns out Kent Swig isn’t the only one looking to form a real estate investment trust in the financial downturn. With more banks unlikely to hand over cash, high-profile companies like Forest City Ratner Companies and American Realty Capital Trust, are launching REITs, according to Investment News. And they’re not just looking for chump change either — American Realty New York Capital Trust’s new REIT, American Realty New York REIT, is angling to raise as much as $1.5 billion for distressed property purchases. Of course, launching a REIT to ease credit woes isn’t easy-breezy — Swig, for one, will have to get all his lenders and creditors on board before he can move forward with the plan.
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Kent Swig

Kent Swig, the real estate developer whose Sheffield57 is considered one of the most troubled condo conversion efforts in New York City history, is rushing to form a real estate investment trust as a means of paying back the $50 million he owes lenders, according to Crain’s. The plan, which has reportedly been in the works for months, would involve grouping together a collection of Swig’s properties in the REIT, doling out shares to investors and then taking the REIT public. The only hitch, however, is that all of Swig’s creditors and lenders have to agree on the plan before it can be enacted — and the lenders are reportedly growing tired of the ongoing negotiations.
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March is off to a rough start for developer Kent Swig, whose $75 million loan backing Art Deco office conversion 80 Broad Street was transferred to a special servicer because of “imminent default” on Friday. Swig purchased the skyscraper, which was originally designed for the New York Maritime Exchange, in 2004, and according to his Swig Equities Web site, he was turning it into a “luxury boutique office building.” The hitch at 80 Broad is just the latest in a string of personal and financial woes for the San Francisco real estate heir. He is already ensnared in several lawsuits with lenders after defaulting on millions worth of mortgage and mezzanine loans related to his Sheffield57 conversion, and earlier this week, rumors surfaced that he was splitting with his wife of more than two decades, Liz Macklowe, daughter of developer Harry Macklowe. In January he was hit with lawsuits over allegedly unpaid bills on his would-be new offices at 770 Lexington Avenue. [WSJ]

The once dominant commercial property firm Helmsley Spear, owned by embattled developer Kent Swig, is ending its third-party commercial brokerage operations to focus on managing its own assets and acquiring others, the company said in a statement. A division of Helmsley Spear is in negotiations to purchase “several” buildings, either commercial or multi-family, in New York City, a source at Helmsley Spear said. “We have identified the assets and we are in negotiations. We are past the point of due diligence,” the source said. “We just can’t announce what they are until the contracts have been executed.” In the company statement, it said, “Helmsley Spear looks forward to announcing several new investment acquisitions over the next 30 to 60 days.”… [more]

The Real Estate Board of New York’s 114th Annual Banquet was the usual whirl of floor-length dresses, schmoozing and cameos by politicians like Mayor Michael Bloomberg and Governor David Paterson (see slide show above of The Real Deal’s Lauren Elkies interviewing people at the REBNY event, and click here for a Webcast from the night). But for the first time, a woman presided over the event — new REBNY Chairman Mary Ann Tighe, CEO of the tri-state region of CB Richard Ellis, swathed in a sparkling blue gown. Her presence at the microphone, however, didn’t do much to quiet the boisterous crowd, which was just as loud as usual despite the fact that there were slightly fewer attendees this year than last — 2,000 versus 2,300 last year — according to REBNY President Steven Spinola. The crowd’s smaller size didn’t do much to dampen the markedly higher spirits that set this year’s event apart from last year’s. “Last year, this was like a funeral,” said Jeffrey Levine, principal of Douglaston Development, who attended the banquet with his son Benjamin. “We were licking our wounds from the collapse of Lehman. There’s no question everyone tonight is in a much better frame of mind.”… [more]

201 West 92nd Street (source: PropertyShark)

The investor who acquired Kent Swig’s failed Upper West Side condominium conversion site spanning 92nd to 93rd streets in 2008, is now facing a $53 million lawsuit by Istar Financial to foreclose on the property and place the buildings into receivership. Mendel Mendlowits, whose family owns the famed Adorama camera retail store at 42 West 18th Street, was accused of defaulting on the mortgage loan at 201 West 92nd Street, failing to pay thousands of dollars in taxes and allegedly signing an unapproved lease with a retail tenant. According to the lawsuit, filed Jan. 14 in New York State Supreme Court, Mendlowits failed to pay Istar’s $46 million mortgage loan when it came due July 1, 2009. By Sept. 1, 2009, Istar says it notified Mendlowits that he also owed $329,950 in delinquent taxes and claimed that a June 19, 2009 lease with Playground Pups was signed without the prior consent of the lender. Playground Pups owner Gail Nord angrily denied the allegations to The Real Deal, and said the bank would have to pay for her attorney’s costs if she had to hire one…. [more]