Gap landlord defaults on $70M FiDi loan
Retailer hasn’t been paying rent to Crown Acquisitions for Broadway space
Gap’s landlord in the Financial District claims it is in danger of losing its property because the retailer refuses to pay rent.
The Chera family’s Crown Acquisitions is in default on the $70 million mortgage covering the retail condo that houses Gap’s store on Broadway at the corner of Maiden Lane, the landlord revealed in court documents.
Crown, which along with Morgan Stanley owns the retail condo at 170 Broadway, received notice on July 21 from special servicer Midland Loan Services that it was in default after failing to make the May mortgage payment.
Crown is now “subject to possible foreclosure — and the irreparable harm of losing” the property, Brittany Bragg, the COO, wrote in a court filing.
Representatives for Crown and Gap did not immediately respond to requests for comment.
Crown said it had requested relief on its mortgage, but did not get it. A representative for Midland did not immediately respond to a request for comment.
Last month, Midland noted in its commentary on the loan that Covid-related relief for the property was cancelled “due to lack of additional information provided to process the request.”
Gap sued Crown in July, asking the court to rule the lease terminated when stores were forced to shut down in mid-March.
But Crown argued that the Gap’s store had been underperforming for years before the coronavirus hit, and the retailer had long sought to leave the Broadway space. Crown called the lawsuit “simply an unconscionable ruse” by Gap to get out of its deal.
Gap declared in April that it would stop paying rent at all of its shuttered stores. It has since gotten into several legal confrontations with its landlords.
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