HFZ set to lose stake in $2B XI condo project

Lender TCI schedules foreclosure sale on HFZ's interest in massive unfinished development

New York /
Jul.July 26, 2021 04:37 PM
HFZ's Ziel Feldman (The XI)

HFZ’s Ziel Feldman (The XI)

One of the boldest bets of the past decade on New York City’s high-end real estate market appears to have finally run out of rope — a case study in what happens when big risks don’t pan out.

HFZ Capital Group’s $2 billion XI project on the High Line in West Chelsea is headed for foreclosure after years of hand wringing over its viability, The Real Deal has learned.

The project’s lender, a subsidiary of The Children’s Investment Fund, a UK-based hedge fund, has scheduled a UCC foreclosure sale for October on HFZ’s stake in the mixed-use development, marketing materials show.

Representatives for HFZ Capital, headed by Ziel Feldman, and TCI could not be immediately reached for comment.

The impending foreclosure indicates how far the city’s high-end real estate market has fallen since HFZ bought the site in 2015 for more than $1,000 per square foot — a figure that raised eyebrows for the rose-colored view it represented of the city’s condo market.

But the market was struggling even before the pandemic, and in the past year HFZ has lost control of most of its portfolio to lenders.

In addition to the scheduled foreclosure, TCI is open to selling all of its debt on the property. The hedge fund provided HFZ with a $1.25 billion loan for the project in 2017, including a senior mortgage and a pair of mezzanine loans.

The hedge fund is marketing the balance on that debt for sale with a Cushman & Wakefield team led by Adam Spies, Doug Harmon and Adam Doneger.

The pair of dancing towers at 76 Eleventh Avenue, designed by architect Bjarke Ingels, includes 275 residential condominiums, a 137-key luxury hotel, a spa/wellness center and parking.

As of earlier this year, HFZ owed about $160 million on the mezzanine loans, according to a lawsuit filed by TCI.





    Related Articles

    arrow_forward_ios
    The Centre at Purchase at 1, 2, 3, 4 Manhattanville Road with George Comfort & Sons CEO Peter Duncan (George Comfort & Sons)
    Westchester office park owned by George Comfort & Sons slated for auction
    Westchester office park owned by George Comfort & Sons slated for auction
    Wells Fargo hit with $400M suit for breach of contract linked to robo-signing scandal
    Wells Fargo hit with $400M suit for breach of contract linked to robo-signing scandal
    Wells Fargo hit with $400M suit for breach of contract linked to robo-signing scandal
    HFZ Capital CEO Ziel Feldman, The Platform CEO Peter Cummings, Fisher Building (Getty, Dick Haefner and The Platform)
    HFZ, partners put historic Detroit building on the market
    HFZ, partners put historic Detroit building on the market
    HFZ's Ziel Feldman and Nir Meir
    Ziel Feldman calls Nir Meir a ‘sociopath,’ compares XI lender to mobsters
    Ziel Feldman calls Nir Meir a ‘sociopath,’ compares XI lender to mobsters
    Inside the fight over New York’s foreclosure laws
    Inside the fight over New York’s foreclosure laws
    Inside the fight over New York’s foreclosure laws
    1 St. Mark’s Place heads for foreclosure
    1 St. Mark’s Place heads for foreclosure
    1 St. Mark’s Place heads for foreclosure
    Distrikt Hotel and Stephen Ellman of Zeichner Ellman & Krause (Tripadvisor, Flintlock, ZEK)
    Midtown’s Distrikt Hotel heads for foreclosure as receiver named
    Midtown’s Distrikt Hotel heads for foreclosure as receiver named
    The Chetrit Organization’s Michael Chetrit, Harbor Group International CEO Jordan Slone and 850 Third Avenue (Harbor Group, 850thirdavenue)
    Chetrit Org’s 850 Third Avenue heads to foreclosure auction
    Chetrit Org’s 850 Third Avenue heads to foreclosure auction
    arrow_forward_ios

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

    Loading...