From left: 360 Smith Street, 73 Pineapple Street, 303 East 51st Street, Beekman Tower and 189 Schermerhorn Street

From the February issue:Hundreds of dormant construction sites still dot the city, but a
handful of these beleaguered projects are finally seeing new life –
even if it’s not what was once dreamed of for the location. Those that
have seen some type of resolution were able to do so by selling off
their debt at steep discounts, slimming their construction costs or
setting their sights way lower.
This month, The Real Deal tracked down 20 stalled projects
that have seen some type of resolution within the past several months
(see chart after the jump).  [more] [more]

From left: Leon Charney, owner of L.H. Charney, Peter Duncan, president of George Comfort, and 119 West 40th Street (Building photo source: PropertyShark)

Just weeks after negotiating an agreement to rescue 119 West 40th Street from a mezzanine loan default, George Comfort & Sons and L.H. Charney Associates are facing foreclosure on a $160 million senior mortgage at the site.

CW Capital Asset Management, which is servicing the senior loan on behalf of Bank of America, filed suit in New York State Supreme Court Dec. 14 to foreclose on the property.

George Comfort and Charney originally borrowed $160 million from Wachovia Bank and Greenwich Capital Financial Partners in April 2007, according to the lawsuit, with half coming from each bank. The loan was later sold to GS Mortgage Securities Corp. II, as part of a July 1, 2007, loan purchase deal signed between Greenwich and GS.

In July 2009, Fitch Ratings warned that the 119 West 40th Street loan was performing below expectations. Fitch said the loan was underwritten based on the expectation of resigning below-market leases at higher rents; however, the building fell behind schedule and was transferred to the special servicer in June 2009 with the expectation of imminent default.  More

[more]

From left: Joseph Moinian and his 50 West 23rd Street, and Sitt Asset Management’s 240 West 40th Street

Fitch downgraded a group of securitized loans from Wachovia Bank that includes a Flatiron office tower owned by Joseph Moinian and a Midtown office tower owned by Sitt Asset Management.

The ratings agency downgraded eight loans by Wachovia Bank Commercial Mortgage Trust series 2005-C19, citing concerns about declining cash flows and commercial real estate values.

One Moinian loan is backed by the developer’s 13-story office tower at 50 West 23rd Street in the Flatiron District. The building was 97 percent occupied as of October and has a debt service coverage ratio of 1.52 percent as of June, according to Fitch. A building with a ratio of less than 1 is considered to have negative cash flow.

In June, the building’s broker, Newmark Knight Frank, renewed the 64,000-square-foot lease for a magnet school, called the Manhattan Village Academy for lower rent, following more than a year of negotiations. [more]

Owners of 620 Sixth Avenue (left, source: PropertyShark) removed a parcel (see red box on image on red) once covered by a $235 million mortgage.

Top real estate investors including Yair Levy and Joseph Chetrit are close to defaulting on a $235 million loan on the Bed Bath & Beyond building in Chelsea, a recent lawsuit by an SL Green affiliate says. But to preserve some value in their holdings, the owners transferred a vacant slice of the building’s lot to another entity they own without SL Green’s consent, the court filing says. “With a payment default looming and foreclosure proceedings inevitable, [the owners] sought to convey away a necessary and valuable piece of lenders’ collateral to obtain an unfair advantage in future negotiations, in blatant and egregious violations of the bargains struck by the parties to the loans,” the lawsuit by Green Loan Services, an affiliate of SL Green, says. Developers Levy, Chetrit and Charles Dayan are investors in an entity called CF 620 Owner One LLC, which bought the property at 620 Sixth Avenue between 18th and 19th streets in December 2005 for $289.8 million, city property records show. [more]