Singapore bank sues to foreclose on ex-Playboy Club building

Property owner owes more than $65M, lawsuit alleges

New York /
Nov.November 22, 2021 08:00 AM

5 East 59th Street (Google Maps, 5e59.com)

The Bunnies are long gone, but an overseas lender still wants to get its hands on a Midtown building where a Playboy Club once operated.

The nine-story, mixed-use building at 5 East 59th Street, just north of the GM Building’s pedestrian plaza, is facing foreclosure by a Singaporean investment bank.

The 46,000-square-foot property has been owned since 2015 when an entity backed by GreenOak Real Estate, along with Daniel Ghadamian and Josh Zamir’s Capstone Equities, acquired it for $85 million. It has about 35,000 square feet of office and 11,000 square feet of retail.

United Overseas Bank Limited filed a foreclosure lawsuit against the owner this week, alleging it has defaulted on three loans backed by the property.

The largest of the three loans is the $59 million acquisition mortgage issued in June 2015. The other two are construction loans provided three months later. All three matured in June, but the borrower failed to pay them back, according to the lawsuit, which seeks more than $65 million.

The owner did not return an email request for comment, and Capstone’s office phone did not take a message. Under the state’s commercial eviction and foreclosure moratorium, which is due to expire Jan. 15, when borrowers submit a hardship declaration in court, certain commercial real property mortgage foreclosure actions cannot proceed. But so far, the owner has not claimed hardship.

The joint venture bought the property at a time when all of the office tenants were to leave by the end of the year, and the retail tenant was set to depart soon after, the New York Post reported at that time. The site came with 22,000 square feet of development rights, although no construction permit application was filed to use them.

The lender wants the court to appoint CBRE’s Klaus Kretschmann as a receiver for the property, while seeking a foreclosure judgment.





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