Thor Equities in hot water at 545 Madison

Joe Sitt's firm has had difficulty covering its debt due to an increase in ground rent
May 24, 2019 09:07AM

545 Madison Avenue and Thor Equities' Joe Sitt

545 Madison Avenue and Thor Equities’ Joe Sitt

UPDATED, May 27, 4:51 p.m.: When it rains, it pours for Joseph Sitt’s Thor Equities.

A $30 million CMBS loan from Barclay’s backed by Thor’s 545 Madison Avenue was sent to special servicing due to “severe cash flow issues,” Commercial Observer reported, citing data from Trepp.

Thor used the CMS loan to finance the purchase of the leasehold on the Madison Avenue office tower from BlackRock Realty and LCOR for $53 million in December 2013. But now, Thor has struggled to cover its debt because of to a $450,000 increase in ground rent on the property and stress on the property occupancy, according to servicer commentary.

A source close to the property told CO that Thor has no control over the building after the company sold a 98 percent interest to an unidentified high net-worth international investor.

The announcement comes on the heels of Sitt’s announcement to sell its retail condo at 680 Madison Avenue for an asking price of $370 million.

Last month, a special servicer took over Sitt’s $37 million mortgage on 115 Mercer Street in Soho, which Thor owns with Premier Equities. The neighborhood’s availability rate, at 25.3 percent, is the third highest in the city.

Meanwhile, Thor Equities notched two leases with Knotel at 590 Fifth Avenue and 597 Fifth Avenue, where the flexible-office-space provider will take 11,800 square feet and 6,400 square feet, respectively. [Commercial Observer] — Georgia Kromrei