Tribeca condo conversion to trade for $18M

Developer plans to craft high-end units from bankrupt property

Dec.December 17, 2013 09:50 AM

The court-appointed trustee for an 18,000-square-foot cast-iron building at 56 Walker Street in Tribeca has asked a bankruptcy court to approve the sale of the property for $18 million, according to documents obtained by The Real Deal.

The request comes after the bankruptcy trustee determined that Project 56 Walker, a LLC headed by developer Jason Lee, was the only qualified purchaser for the six-story building. The LLC’s bid was the only one received before a Nov. 22 deadline.

The building had been on the market for about seven months, according to StreetEasy.

Lee told The Real Deal that he planned to convert the property to high-end condos with a swimming pool in the basement. The deal is expected to close by the end of January, if it is approved by the court.

Sotheby’s International Realty brokers Karen Heyman and Tom Doyle represented the trustee in the deal, while the Corcoran Group’s Paul LeMarc Brown and Monica Novo represented Lee. Both brokers declined to comment until the deal closes.

The landmarked 1860s building will be delivered vacant. It has five full-floor lofts with two- and three-bedroom layouts.

The previous owner, Guy Morris, completed a large number of improvements to the building and had planned on adding a 1,900-square-foot penthouse with a 700-square-foot rooftop terrace before falling victim to foreclosure.

The building first went into foreclosure after a loan agreement between Morris and lenders Broadway Bank and Wexford/HPC Mortgage Company went awry. Morris alleged that the lenders had not provided all the money they’d initially promised. He lost control of the building last year after a bankruptcy judge appointed the trustee.

Later, Wexford/HPC affiliate WexTrust went into receivership, with two of its top executives pleading guilty to federal fraud charges. MB Financial Bank eventually took over the loan and filed to foreclose earlier this year.

Morris could not be reached for comment.

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