Albert Behler’s Paramount Group wants to boot up a trio of tenants it accuses of refusing to vacate retail condos at the Row NYC Hotel despite racking up millions of dollars in arrears.
A Paramount-linked entity is suing entities tied to Rockpoint Group and Highgate Holdings, owners of the hotel at 700 Eighth Avenue, along with the operators of its food court, cafe and gym, claiming it’s owed more than $3.5 million in back rent. Crain’s first reported the lawsuit.
Paramount alleges that the tenants stopped paying rent in 2020, when the retail space was owned by Joe Sitt’s Thor Equities, and now wants the court to evict them. The REIT has also asked the court to award it a money judgment as the tenants allegedly continued to occupy the spaces after their leases were terminated.
The operators of the food court, cafe and gym were informed in October that they had defaulted and then blew a November deadline to settle the debt, Paramount claims, after which it notified them that their leases would be terminated.
Paramount claims the tenants also owe roughly $464,000 in additional rent and real estate taxes, bringing the total bill up to about $4.2 million. The REIT also filed a temporary injunction to have the tenants pay about $118,000 per month in rent and taxes on the spaces it says they continue to occupy.
The Row NYC Hotel — which has operated as a shelter during the pandemic, first for the homeless and now for migrant families — has been beset by distress in recent months.
Wells Fargo in September initiated a foreclosure on the ground beneath the 1,331-room hotel from investor David Werner, claiming that Werner began missing payments on a $275 million loan in 2020. Werner partnered with Deutsche Asset & Wealth Management in 2013 to buy the land beneath the 28-story hotel for $325 million.
Meanwhile, a debt fund controlled by Paramount took over the 27,000-square-foot retail condo at the base of the hotel from Thor Equities through a foreclosure last April, claiming Thor had defaulted on an $80 million loan. Thor bought the retail space from hotel owners Rockpoint and Highgate for $64 million in 2014. At the time Paramount took it over last year, it was valued at a little over $45 million, according to city records.
Highgate and Rockpoint own the hotel portion of the property along with NorthStar Realty Finance. The owners put the hotel on the market in 2019 for about $220 million after paying $200 million for it in 2010.
Attorneys for Paramount Group declined to comment. Attorneys representing Rockpoint and Highgate did not immediately respond when reached for comment.