The Real Deal New York

Atlas to buy $102M LIC building out of bankruptcy

By Adam Pincus | October 11, 2013 03:25PM

Midtown-based real estate investment firm Atlas Capital Group is expected to purchase a 1 million square foot commercial building in Long Island City valued at more than $102 million from property investor Mark Karasick, federal bankruptcy records show.

Atlas Capital, headed by Jeffrey Goldberger and Andrew Cohen, is the mezzanine lender on the property at 47-44 31st Street. To acquire the building through a deed-in-lieu process, it will pay $5 million to the Karasick ownership entities and pay off the entire $77 million first mortgage, according to records filed yesterday with the U.S. Bankruptcy Court in Manhattan.

This is at least the second Atlas purchase in Long Island City in the past two years. In December 2012 it paid $13.5 million for 24-02 Queens Plaza South.

Atlas and Karasick did not return requests for comment.

The 31st Street structure built in 1920 covers the entire city block from 47th to 48th Avenues And 31st Street And 30th Place. It is next door to the Falchi Building at 31-00 47th Avenue, which Jamestown Properties bought for $81.2 million in May 2012, and plans to create a Chelsea Market-style retail experience.

The Karasick entities purchased the leasehold in 2000 and the fee interest in the building in 2006, city records show. In 2006, the owners took out $77 million as a first mortgage loan from the Canadian Imperial Bank of Commerce, as well as an additional $28.3 million in mezzanine loans from Petra Mortgage Capital. Petra transferred its interest in those loans June 27, 2012, the records show, to Atlas. The first mortgage is now part of a commercial mortgage backed security managed by C-III Asset Management.

At some point, the $77 million loan matured, but the owners could not refinance it, and fell into default, which led to the voluntary bankruptcy filed yesterday and the planned sale. In addition, Karasick owed Atlas more than $26.6 million in a deficiency claim.