Invictus purchases $88M loan on Kent House

Invictus Real Estate Partners has swooped into a Brooklyn residential development, buying an $88 million non-performing note from Austin-based hedge fund Prophet Capital.

The New York-based private equity firm then immediately took steps to foreclose on the property.

The loan is for CW Realty’s The Kent House, located at 187 Kent Avenue in Williamsburg. According to the Commercial Observer, the debt is made up of a $78 million first mortgage and a $10 million mezzanine loan.

Invictus initially filed a foreclosure lawsuit against CW Realty for the defaulted $78 million mortgage. But apparently, the court proceedings stalled after CW Realty filed a hardship declaration on Sept. 17. Under the state’s newly enacted commercial eviction and foreclosure moratorium, certain commercial real property mortgage foreclosure actions can’t move forward until Jan. 15, 2022, when borrowers submit a hardship declaration in court.

Invictus, however, is also pursuing a UCC foreclosure process on the $10 million mezzanine loan, according to the public notice. The foreclosure auction is scheduled for Nov. 4.

The Kent House is located in a buzzy area of Williamsburg, close to two subway stations and numerous shopping and dining spots. The luxury mixed-use project features 96 apartments and 31,000 square feet of retail space, per Commercial Observer. Amenities include a spa, rooftop deck, fitness center and coworking space.

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Cheskie Weisz’s CW Realty landed the original $78 million loan on the 140,000-square-foot development in 2018. The company went into contract to buy the development site in 2016, ultimately purchasing it for $42.5 million.

Invictus focuses on equity investment, development and debt origination. Earlier this year, the company secured more than $55.8 million in agency debt, according to the publication.

The debt was used to help secure the purchase of The Waypointe in Norwalk, Connecticut. The company, which owned a 10 percent stake in the project, purchased the other 90 percent stake from Carmel Partners for the 464-unit rental, which is valued at $157 million.

CW Realty is among the most prolific developers in Brooklyn. Nearly two years ago it paid $20 million for the largest undeveloped site in Vinegar Hill, which has a controversial history. The developer harborned plans for a five-story, 59-unit luxury rental building.

In 2019, the company purchased a massive Williamsburg assemblage for close to $39 million. The firm bought a full blockfront on Hope Street between Keap and Rodney streets, where it plans a 145-unit, seven-story rental building.