Thor faces foreclosure on site where lender says it’s seeking “unrealistic rents”

Landlord defaults on second retail loan in Soho this year

494 Broadway and Thor Equities' Joe Sitt (Credit: Google Maps)
494 Broadway and Thor Equities' Joe Sitt (Credit: Google Maps)

A lender looking to foreclose on a Thor Equities retail property says the landlord is to blame for its vacancy problem.

U.S. Bank National Association, a trustee for Morgan Stanley Bank of America Merrill Lynch Trust, claims in a suit that Joe Sitt’s firm has been seeking “unrealistic rents for new leases, ensuring that vacancies mount.”

The bank is looking to foreclose on 494 Broadway

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The plaintiff alleges Thor stopped paying the mortgage in July because of current and expected vacancies. In its letter to the court, an attorney for the mortgage lender criticized Thor’s asking rents, which it said are well above the going rate.

“Currently, the Borrower is listing space for lease at $675 per square foot when the rents in the market are below that level (a fact of which Borrower is aware),” attorney Gary Eisenberg said in a letter to the Supreme Court of New York.

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The lender also asked the court to appoint San Diego-based receiver Trigild without delay to ensure any advances are “properly spent and not instead used to advance unrealistic pursuits,” because the rental income for the building is not sufficient to make payments.

The attorney for the plaintiff was not available for comment. Reached by phone, a spokesperson for Thor declined to comment.

The building is not the only location where Thor is experiencing problems. Marx Realty evicted the company from its ground lease at 545 Madison Avenue in October over $554,583 in unpaid rent and $1.6 million in outstanding real estate taxes. Earlier this year, a special servicer took over Thor’s defaulted $37 million loan at 115 Mercer Street in Soho, where the firm was renegotiating a lease with retailer the Kooples.

For years, Thor was a champion of brick and mortar. But in August the firm launched a new business, ThorLogis, with plans to spend $900 million on buying and developing industrial properties.

Correction: A previous version of this story incorrectly stated that Jenel Management owns an 11 percent stake in 494 Broadway. Jenel has no stake in the property.