If selling apartments at one of Manhattan’s most troubled residential condominiums wasn’t hard enough, now its owners can’t even afford to rent a sales gallery to sell them.
The sponsors of the under-construction 125 Greenwich Street tower in Lower Manhattan, where construction has all but stopped and two foreclosure proceedings are ongoing, are being accused of failing to pay rent for a sales gallery at One World Trade.
One World Trade Center
The landlord at One World Trade, the Durst Organization, filed a lawsuit in December against the sponsors — Howard Lorber’s New Valley, Davide Bizzi’s Bizzi & Partners, the Carlton Group and China Cindat — for unpaid rent totalling $715,000 for their space on the tower’s 84th floor. The firm is seeking $1.4 million in damages.
According to Durst’s lawsuit, the owners have not paid rent and maintenance costs for the sales gallery at One World Trade since May, the same time it ceased paying its lenders and construction crews. The Durst claim states that the sponsors entered a five-year lease in 2016 for most of the 84th floor.
“They abandoned the space despite having two years left on their lease,” said Jordan Barowitz, a spokesperson for Durst. He added that they “probably had a nice view of the building.”
In an answer to the complaint, filed last week in New York County Supreme Court, the owners of 125 Greenwich denied “knowledge or information” of Durst’s claims and accused the landlord of not paying for agreed tenant improvements. The project’s sponsors declined to comment.
It is the latest setback for the residential project, which has been marred by crawling condo sales and internal fighting. Last summer, the project’s sponsors defaulted on loan repayments. Construction costs totalling almost $40 million also went unpaid as the capital dried up.
As a result, two of its major lenders — United Overseas Bank and EB-5 lender United States Immigration Fund — filed paperwork to foreclose on the building in June and July. UOB sold its senior debt, valued at $195 million, to Florida-based real estate investment firm BH3 Capital in August. Another $180 million was not released to the project. BH3 declined to comment.
Nicholas Mastroianni II
A planned foreclosure auction for the $195 million of EB-5 debt provided by USIF never went ahead for undisclosed reasons. USIF CEO Nick Nick Mastroianni did not respond to requests for comment.
The project’s troubles have been in part impacted by Lower Manhattan’s weak residential condominium market. In the last quarter of 2019, just 86 apartments were sold, the lowest of any fourth quarter in more than fifteen years, according to brokerage Corcoran.
The sponsors shaved $20 million off the projected sellout cost, lowering it to $856 million in January last year. The residential units are priced between $1.3 million and $6 million. Douglas Elliman, the brokerage which Lorber runs as chairman, is handling sales.