LNR files to foreclose on LI office complex

LNR Co-CEOs Justin Kennedy and Tobin Cobb, and 1981 Marcus Avenue in Long Island

LNR Partners has filed suit to foreclose on CLK Properties and
Coolidge Equities after they allegedly defaulted on $110 million
in mortgage debt backed by a corporate office complex in Long
Island.

LNR, a Miami Beach-based special servicing firm, said the
borrowers, Lake Success-based CLK and White Plains-based
Coolidge, failed to make debt service payments on the Lake
Success, N.Y. loan starting in September 2010, when the loan
matured.

In 2006, the borrowers originally acquired the 672,000-square-
foot property, called the Gateway at Lake Success, from Laurence
Gluck’s RP Stellar and Rockpoint Group for $165 million.

Gluck had borrowed $82 million from North Fork Bank to help
finance his $105 million acquisition of the complex in 2005. In
August 2005, Gluck restructured the debt with Greenwich Capital,
resulting in the new mortgage debt of $110 million.

By December 2005, Greenwich Capital sold the debt to LaSalle
National Bank, the trustee for a mortgage-backed security named
GGCFC 2005-GG5.

According to documents filed with the Securities and Exchange
Commission, the property included two buildings at 1981 and 1983
Marcus Avenue. The property was 97 percent occupied at the time
of the loan, however GreenPoint Bank was the largest tenant at the
property with 118,000 square feet of space, but no longer needed
the space because of its merger with North Fork Bank.

State Farm Mutual Automobile Insurance had two leases for
58,000 square feet and 19,000 square feet, but those leases expired
in 2009, and the new owners spent millions of dollars to upgrade
the space before smacking headfirst into the crash of the real estate
market.

Analysts said that the property is now only 70 percent leased.
Listings on the CLK website show that leases are available at the
complex starting at $26 a square foot up to $33.50 a square foot.

“The current owners don’t want to fund the cost of tenant
improvements to re-lease the space,” said Ben Thypin, senior
market analyst at Real Capital Analytics, a Manhattan-based
research firm.

The debt was assigned to LNR in April of this year. LNR is
asking the court to allow a receiver to be appointed and to enter a
judgment against the borrower following the sale of the debt.

LNR has filed suit to foreclose on a number of New York
area properties in recent months, including Joseph Moinian’s
Renaissance rental tower in the Financial District
and Larry Silverstein’s 575 Lexington Avenue.

Attorney Eli Mattioli, representing LNR, declined to comment, as
did James Houlihan, principal of Coolidge Equities, and Darren
Leiderman, senior director at the complex’ leasing agent, Sutton &
Edwards. In addition, officials from Stellar declined to comment.