Thor’s $150M loan on 597 Fifth heads to special servicing

Firm led by Joe Sitt has not made payment on 86K sf building since July

New York /
Nov.November 25, 2020 06:15 PM
Joe Sitt and Charles Scribner’s Sons Building in Midtown (Thor, Google Maps)

Joe Sitt and Charles Scribner’s Sons Building in Midtown (Thor, Google Maps)

Thor Equities’ troubles at 597 Fifth Avenue are mounting.

The firm’s $105 million commercial mortgage-backed securities loan tied to the Charles Scribner’s Sons Building has gone into special servicing, according to a Trepp report. Joe Sitt’s firm has not made a loan payment on the 86,000-square-foot building since July.

Thor’s attempt to pay off part of the loan at a discounted amount was rejected by the servicer, according to Trepp. The mortgage on the Midtown property is now at risk of “imminent payment default.”

Thor bought the century-old building for $108.5 million in 2011. It landed the $105 million refinance from UBS Real Estate Securities three years later. Thor also took on additional debt, including a $25 million junior mezzanine loan from SL Green Realty and a $10 million senior mezzanine loan from Toronto-based Oxford Properties.

At the time of the 2014 deal, the 12-story Beaux Arts building had an appraised value of $180 million.

The building has had a revolving door of retail tenants since Sephora exited its 8,000-square-foot space in 2017. Thor then inked a short-term lease with Lululemon for that space. The retailer left in 2019 for 20,000 square feet at nearby 592 Fifth Avenue; Club Monaco replaced it the same year. Flex-office provider Knotel signed a 6,400-square-foot lease for a different space at the building the same year.

Meanwhile, Thor has offloaded some of its Manhattan retail properties in recent years, including a commercial condo at 51 Greene Street and three retail condos at 212 Fifth Avenue. In August, the company defaulted on a $25 million mezzanine note from SL Green on 590 Fifth Avenue.

A spokesperson for Thor did not immediately return a request for comment.


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