The debt on the iconic Lever House at 390 Park Avenue has sold at a $68 million loss.
An entity tied to Ramsfield Hospitality Finance paid $12.8 million for the commercial-mortgage backed securities loan on the property, the New York Post reported. The debt, which originally carried a balance of $110 million, had since been paid down to $80.2 million, according to data from financial firm Trepp.
Aby Rosen’s RFR Realty failed to pay back the loan when it expired in March 2015, having struggled to refinance the debt on the tower because of a rent reset. Rosen’s firm, which signed a ground lease with landowner the Korein family in the 1990s, would see its ground rent payments jump from $6 million to $20 million in 2023. And now, occupancy in the building has fallen to 50 percent, Trepp data shows.
If Ramsfield were acting as “white knight” on the deal, RFR could now try to redevelop the property to draw in tenants at rents that would cover the cost of the rent increase, according to the Post.
“This has value from a nuisance point of view, and someone could come in and buy [the lease] for $20 million,” Manus Clancy of Trepp told the publication.
The Korein family signed a ground lease last year with a joint venture between Brookfield Properties and Waterman Interests. A foreclosure was filed by servicer CWCapital in 2016, and the new ground lease could kick in if RFR is booted from the property, according to the Post. [NYP] — David Jeans