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Fred Ohebshalom faces foreclosure at Midtown office
Minnesota-based firm bought debt on 9-story building
Fred Ohebshalom is under pressure in Midtown from a Minnesota-based debt buyer.
Stillwater Asset Management is looking to foreclose on Ohebshalom’s nine-story office building at 226 East 54th Street after purchasing the building’s debt in March.
The property, between Second and Third avenues in Midtown East, provided office space to Sky Management, the Ohebshalom family’s property management firm.
Sky Management principals Jonathan and Ben Ohebshalom are defendants in the foreclosure action, which Stillwater brought before a Manhattan court Thursday. The office building is closed to “visitors, brokers or residents,” according to Sky’s website.
Fred is the founder of Empire Management, which manages 2,000 apartments and 1 million square feet of commercial space, according to its website; Alex Ohebshalom is its chief operating officer.
Stillwater claims that revenue from the 31,000-square-foot building fell below an amount required by a debt service covenant in the building’s $12.6 million mortgage.
Party venue Space 54 opened in the building’s ground-floor commercial space in 2019 and reportedly hosted events for the Real Housewives of New York, but closed six months later when the pandemic struck.
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Fred Ohebshalom — through Gemini Partners Realty and Majestic Realty Associates — sued Space 54 in March for half a million dollars in back rent. Principal and interest payments on Ohebshalom’s mortgage came to $65,600 per month, but when Stillwater sought control of the building’s revenue, the owners “refused,” according to the Minnesota firm.
Stillwater demanded in September that Ohebshalom pay the outstanding loan balance of $12 million. He had bought the building in 2007 through Majestic Realty Associates for $7.7 million.
Like many real estate clans, the Ohebshaloms are no strangers to legal or family drama.
A Downtown Brooklyn rental building owned by Richard Ohebshalom’s Pink Stone Capital is facing foreclosure. Richard once sued his father, Fred, for allegedly sapping a family trust and seeking revenge after Richard left Empire in 2010 to launch his own commercial real estate firm.