The Real Deal New York

Lone Star seeks to tap NKF’s Kuhn as receiver over Manhattan portfolio

The Dallas-based company filed a lawsuit March 6 to foreclose on Vantage properties
By David Jones | March 21, 2012 02:30PM

Lone Star Funds yesterday asked a Manhattan Supreme Court judge to appoint Newmark Knight Frank President James Kuhn as a receiver over a multi-family building portfolio in a second foreclosure case involving Vantage Properties.

Dallas-based Lone Star, after acquiring the loans from Anglo Irish Bank, filed a lawsuit March 6 to foreclose on the portfolio, which includes 473 units in 10 low-rise apartment buildings in Washington Heights, Harlem and other neighborhoods in Upper Manhattan.

The case has previously been sealed from public view, but in court papers filed Tuesday, Lone Star lawyers alleged that Vantage, led by Neil Rubler, failed to make monthly payments on the loans since May 2011. As of March 1, 2012, the loan balance is more than $57 million, and the outstanding principal amount is $52.1 million.

Lone Star, in the filing, said the value of the properties has fallen below the loan balance.

The addresses include 248 Sherman Avenue, 9-23 Thayer Street; 38-48 Sickles Street90 Ellwood Street; 566 West 190th Street; 570-576 West 190th Street, 552-554 West 188th Street, 556-558 West 188th Street and 961-967 St. Nicholas Avenue.

According to the filing, Kuhn agreed to accept the receivership at a “very competitive rate” if approved by the court.

The properties have been in distress for some time. Massey Knakal Realty Services put the portfolio on the market in 2010 for what was then the face value of the note: $51.5 million. The note at the time was officially listed as performing, it has since gone into default.

The suit is the second foreclosure filing by Lone Star this month against Vantage. As The Real Deal previously reported, Lone Star filed a separate $37 million suit against Vantage and New Jersey-based Normandy Real Estate for four upper Manhattan apartment buildings.

On March 19, a Manhattan Supreme Court judge appointed attorney Bernice Leber of Arent Fox as the receiver over that portfolio.

A hearing is scheduled for tomorrow before Justice Anil Singh in Manhattan Supreme Court.

A spokesperson for Vantage declined comment. Newmark Knight Frank officials were not immediately available for comment and lawyers for Lone Star did not return calls seeking comment.