Owner of Greenpoint portfolio dodges foreclosure with sale to Black Spruce

SMK’s buildings were tied to now-dismissed predatory lending suit against Madison Realty Capital

TRD New York /
Feb.February 23, 2017 08:30 AM

The owner of nine Greenpoint rental buildings narrowly escaped foreclosure Wednesday after closing on the $27 million sale of eight of the properties to Black Spruce Management, sources told The Real Deal.

The distressed properties were notably at the center of a $150 million lawsuit from 2015 in which the owner, Sylvester Smolarczyk’s SMK Property Management, accused Madison Realty Capital of predatory lending practices. A Kings County Supreme Court judge dismissed the suit in September.

Madison, which had moved to foreclose on the buildings prior to the suit, has since received full repayment of the more than $22 million in existing debt as a result of the portfolio sale, sources said. Sources said a foreclosure auction was scheduled to occur later this month, though court documents do not indicate a date.

Smolarczyk decided to sell all of the buildings to Josh Gotlib’s Black Spruce TRData LogoTINY except 553 Meeker Avenue. That building is no longer in danger of foreclosure now that the debt has been repaid, sources said.

The portfolio consists of 3 Sutton Street, 5 Sutton Street, 673 Meeker Avenue, 669 Meeker Avenue, 667 Meeker Avenue, 657 Meeker Avenue, 661 Meeker Avenue and 164-166 Kingsland Avenue.

Madison will continue to serve as a lender on the properties. It provided $18 million in acquisition financing to Black Spruce, sources said. The purchase price equates to about $450 per square foot.

The properties, all located near the Brooklyn-Queens Expressway, collectively span 64,000 square feet and hold 57 rental apartments. They were built separately throughout the 2000s, records show, and are nearly fully occupied.

A source involved in the transaction described it as a “hairy deal” and a “tough one,” given that it took SMK nearly a year to sell the distressed portfolio.

Rosewood Realty Group’s Aaron Jungreis, Ben Khakshoor and Mike Kerwin represented both sides in the deal. Madison and Rosewood declined to comment. Black Spruce and SMK could not be reached.

Black Spruce, a NoMad-based investment firm, has been increasingly active in the city’s multifamily market over the past six months. The firm bought a 14-building Hell’s Kitchen portfolio for $110 million, a 14-building Chelsea package for $80 million, and earlier this month an 11-story property in the Bronx for $26 million.

Earlier this month, Madison moved to foreclose on an East Village portfolio owned by Raphael Toledano. But Toledano, sources told TRD, is engineering a sale of the portfolio to Jeff Sutton for about $145 million.


Related Articles

arrow_forward_ios
An aerial view of a pop-up drive-in theater built in the parking lot at the Broadway Commons in Hicksville, New York (Getty)

Covid pummeled shopping centers, but their parking lots are thriving

Covid pummeled shopping centers, but their parking lots are thriving
20 West 33rd Street (20West33rd)

Furnishing firm picks up 4 condos at 60 Guilders, Carlyle’s Midtown South project

Furnishing firm picks up 4 condos at 60 Guilders, Carlyle’s Midtown South project
Bank OZK CEO George Gleason (Unsplash; Bank OZK)

Bank OZK’s lending up in third quarter

Bank OZK’s lending up in third quarter
Gap CEO Sonia Syngal (Getty)

Gap Inc. will close 350 stores and exit malls entirely

Gap Inc. will close 350 stores and exit malls entirely
Steve Cohen and Citi Field (Getty)

Citi Field lease clause could stymie billionaire’s quest for the Mets

Citi Field lease clause could stymie billionaire’s quest for the Mets
Consumers are using streaming services more than ever, and data center real estate is booming (iStock)

Real estate for data centers is having a moment

Real estate for data centers is having a moment
Paul Manafort and Manhattan district attorney Cyrus Vance, Jr. (Getty)

Manafort mortgage-fraud case dismissed, again

Manafort mortgage-fraud case dismissed, again
Howard Hughes’ Saul Scherl and a rendering of 250 Water Street (Getty, The Howard Hughes Corporation/SOM)

Howard Hughes to launch review process for $1.4B Seaport tower

Howard Hughes to launch review process for $1.4B Seaport tower
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...