Brooklyn development’s $150M loan falls into default

Apollo Commercial Real Estate Finance says borrower stopped paying interest in March

Apollo Commercial Real Estate Finance CEO Stuart Rothstein and RedSky Capital principal Benjamin Bernstein (Credit: Apollo and ICSC)
Apollo Commercial Real Estate Finance CEO Stuart Rothstein and RedSky Capital principal Benjamin Bernstein (Credit: Apollo and ICSC)

A $154.6 million loan for a Brooklyn development site has fallen into default, according to Apollo Commercial Real Estate Finance.

The lender made the disclosure in a recent public filing, stating that the borrower stopped paying interest at the beginning of March, and the property is now for sale.

Apollo did not reveal details about the site’s location, but Crain’s reported that the loan was associated with a collection of properties owned by RedSky Capital, a real estate investment firm. RedSky reportedly purchased the sites with London-based JZ Capital Partners.

Cushman & Wakefield is marketing the site for sale.

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While the default raises questions about how lenders will fare in the pandemic, Apollo this week released a statement to shareholders assuring them that the firm was stable.

“As an organization, Apollo is well-prepared to function remotely,” said the firm’s CEO, Stuart Rothstein. “We continue to engage in an ongoing active dialogue with our borrowers to understand in real-time what is taking place at the commercial real estate collateralizing ARI’s investments.”

RedSky Capital did not directly address reports of distress at the site.

“We’re focusing on working our way through this pandemic,” RedSky founder Ben Bernstein told Crain’s. “That’s where my attention and focus is right now. Day to day as the world is imploding.” [Crain’s] — Sylvia Varnham O’Regan