A New York State Supreme Court judge has appointed a receiver to oversee a Washington Heights rental building, marking the third such appointment in recent months in the distressed portfolio owned by Vantage Properties and investment partner Area Property Partners. Justice Anil Singh named Paul Victor, a former Bronx Supreme Court judge, as a receiver to oversee the 48-unit walk-up rental property at 344 Fort Washington Avenue.
Dallas-based Lone Star Funds filed suit against Vantage in March, after the real estate firm allegedly defaulted on a $5.4 million loan from Anglo Irish Bank. Lone Star acquired the loan from Anglo in 2011, as part of a $9.4 billion divestment of U.S. real estate loans by the Irish lending giant.
The initial court records in the case were sealed, but Propertyshark.com shows a $5.4 million lis pendens filed (indicating the start of the foreclosure process) against an entity called 344 Fort Washington Property Owner, which is the defendant in the case, according to court records.
A spokesperson for Vantage referred calls to James Simmons, a partner and head of U.S. Emerging Markets at Area. Simmons did not comment, but the company released a statement on the lawsuit through a spokesperson:
“Area has successfully completed restructuring or refinancing on many of the New York City multi-family properties it acquired in or around 2007, and anticipates similar outcomes with respect to 344 Fort Washington Avenue and other properties currently under negotiation.”
A source familiar with the case said the foreclosure was expected to drag out for a long time, which could mean over a year in the state court system. The case could end in a discounted loan payoff or other type of restructuring, the source said.
As The Real Deal previously reported, a state Supreme Court judge named James Kuhn, president of Newmark Knight Frank, to oversee a 10-building portfolio that Lone Star filed to foreclose on. The loan on the portfolio, which includes 473 units in Harlem, Inwood and other neighborhoods, went into default when Vantage allegedly failed to make monthly payments starting in May 2011. The loan on those properties has an unpaid balance of $57 million.
On May 7, Victor was named receiver over those properties as well. Lewis Barbanel, president of Barberry Rose Management, was named managing agent over the properties, working on behalf of the receiver to collect rents and oversee repairs, court records show.
In March, Lone Star also filed suit to foreclose on $37 million in loans backed by a Manhattan portfolio of four upper Manhattan apartment buildings owned by Vantage and New Jersey-based Normandy Real Estate. Justice Ellen Coin named Bernice Leber, a partner in the law firm of Arent Fox, as receiver in that case.