Midtown landlord sues to stop foreclosure by Maverick
R&B claims Signature ignored promise of forbearance on two buildings
The owner of two Midtown office buildings claims its bank threw it to the wolves after promising to help it weather the pandemic.
R&B Realty Group told a state court in Manhattan last week that Signature Bank did not honor a verbal pledge to extend forbearances on 28 West 36th Street and 32 West 39th Street, instead declaring loans on those buildings in default and selling the debt to distressed-asset buyers.
The landlord alleges that Maverick Real Estate Partners, which purchased the mortgages, is taking advantage of the Covid-19 pandemic to grab R&B’s buildings for a song.
“Among other things, [Maverick] is charging a default interest of 24 percent on each of the loans, and seems intent to continue to do so in order to … acquire the buildings on the cheap,” R&B’s complaint states. (Rates above 25 percent are subject to New York’s usury law.)
R&B, which has owned the buildings for nearly 20 years, claims it had $800,000 of undrawn credit with Signature, making the bank’s default declaration invalid.
The landlord said it has been unable to pay principal or interest on its loans since May 2020 because rent collection was only 30 percent to 40 percent from April to February. That would be dramatically lower than the roughly 95 percent collection rate enjoyed by large office landlords including SL Green, ESRT and Vornado.
Since buying the loans from Signature, Maverick has told tenants at the West 36th Street building to pay it rent directly, the lawsuit asserts. R&B called the action an “end run” around Gov. Andrew Cuomo’s bans on commercial evictions and foreclosures, telling the court Maverick’s attempt “should not be permitted.”
The bans on evictions and foreclosures are expected to be extended at least through May.
Signature Bank and Maverick did not return requests for comment.
Maverick has publicly touted its strategy of purchasing distressed real estate assets since at least 2018 when it announced a $200 million fund for that purpose. It separately bought $40 million in loans that year from Signature Bank that were backed by 31 properties controlled by controversial Brooklyn investor Cheskel Strulowitz.
In a separate case, Maverick sought to foreclose last week on a Chelsea apartment building at 416 West 25th Street, alleging the owner had defaulted on a loan in May 2019. A judge had previously stopped the foreclosure.