Urban Edge hit with foreclosure filing at 290K sf commercial building

February 2020 just might have been the wrong time to buy office and retail buildings in New York City.

That fateful month, Urban Edge Properties picked up two of them in Midwood. Now one has run into trouble: Wells Fargo filed to foreclose on the nearly 300,000-square-foot building at 1630 East 15th Street, citing a single missed payment last month on a $65.5 million loan.

The bank, a trustee for owners of the now-securitized loan, which Urban Edge assumed upon buying the property, is also asking for a receiver to be appointed for the building.

Jeffrey Olson’s Urban Edge acquired the two Brooklyn properties from Elie Schwartz’s Nightingale and Steven Kassin’s Infinity Real Estate for $88.8 million as the city’s first cases of Covid popped up.

The developers — a group including Schwartz, Kassin and Isaac Franco — had borrowed $65.5 million in 2018 from LoanCore Capital to buy the three-story, 12-year-old Kingswood Center. Later they added two floors and 60,000 square feet. Now 290,000 square feet, its tenants include retailer T.J. Maxx and an eye and ear infirmary.

Two blocks away, at 1715 East 13th Street, the Nightingale and Infinity-led group built Kingswood Center II, which Urban Edge has rebranded as Kingswood Crossing. The five-story, 115,000-square-foot office and retail project replaced a 22,000-square-foot parking lot they purchased in 2014 for $79.1 million, landing Target and Marshalls as anchors, plus some health care tenants.

Two office spaces totaling 25,000 square feet remain available in the building.

A few months into the pandemic, with many New Yorkers avoiding the subway, it seemed that offices outside of Manhattan’s central business districts would do better in the Covid era. But the hub-office surge failed to materialize, as few people want to be at any desk five days a week, and employers look to save on leasing costs.

Olson became chairman and CEO of real estate investment trust Urban Edge when the company spun off from Steven Roth’s Vornado in late 2014. The firm focuses on urban retail development in the Northeast. It owns 76 properties totaling 17.2 million square feet of gross leasable area, according to its website.

Representatives for Urban Edge and LoanCore were not immediately available to comment.

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