Sutton’s lender selling $195M loan at 529 Broadway

UBS and Morgan Stanley provided financing for Soho retail property in 2016

New York /
Jan.January 12, 2022 02:15 PM

Jeff Sutton of Wharton Properties in front of 529 Broadway (Wharton Properties, LoopNet, iStock)

The lender to Jeff Sutton’s Wharton Properties and its partners at 529 Broadway is looking to sell the loan on the six-story retail property in Soho.

UK-based Rothesay Life is looking to sell the $195.3 million loan on the property, a person familiar with the deal told the Commercial Observer. Eastdil Secured has been charged with marketing the loan.

The loan was provided by UBS and Morgan Stanley in 2016 to joint venture of Wharton, A&H Acquisitions, Aurora Capital Associates and Thor Equities. It replaced previous loans from Deutsche Bank, including a $100 million acquisition loan, a $30 million building loan and a $9.3 million mortgage. UBS issued a new $56.6 million loan in addition to the loan replacements.

The financing was assigned to UK-based Rothesay Life in 2016, according to the Observer. The loan is reportedly set to mature in September 2026 and is being marketed with a 3.42 percent fixed-rate coupon.

The joint venture bought the building in 2012 for $147.9 million, a neighborhood record at the time. The partners proceeded to demolish the original buildings on the site and build a six-story structure designed by BKSK Architects.

Nike is the anchor tenant of the 52,000-square-foot complex. According to the Observer, the company was paying $16 million in annual rent prior to the pandemic and has at least ten years left on its lease.

Soho’s retail market marked some positive developments towards the end of 2021. The year saw several upscale brands opened outlets in the neighborhood and the Meatpacking District, rather than on Fifth Avenue or Madison Avenue.

While Wharton is looking to sell the loan for its Soho outpost, it has a recent history of selling retail buildings altogether. In September, Wharton sold a 17,000-square-foot retail building at 2917 Nostrand Avenue in Brooklyn’s Sheepshead Bay for $18 million. The buyer was a limited liability company.

Thor Equities is facing its own struggles in the retail sector. A special servicer filed to foreclose on a loan at 470 Broadway, which Thor had defaulted on. The debt consists of $18 million in unpaid principal, $2.6 million in unpaid interest and $2.3 million in protective advances.

[CO] — Holden Walter-Warner

Correction: A previous version of this post incorrectly identified the seller of the loan.





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