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Apollo writes off mezz at 111 West 57th Street

Lender dimmed sales expectations at JDS Development, Property Markets Group tower

JDS’ Michael Stern, 111 W 57th Street, Apollo Commercial Real Estate Finance's Stuart Rothstein (Getty, Short final/CC BY-SA 4.0/via Wikimedia Commons, JDS, Apollo Commercial Real Estate Finance)
JDS’ Michael Stern, 111 W 57th Street, Apollo Commercial Real Estate Finance's Stuart Rothstein (Getty, Short final/CC BY-SA 4.0/via Wikimedia Commons, JDS, Apollo Commercial Real Estate Finance)

Sales at one of the newer Billionaires’ Row towers are not going as expected, leading a lender to write off a portion of a loan on the property.

Apollo Commercial Real Estate Finance, the real estate investment trust arm of Apollo Global Management, wrote off a junior mezzanine B loan at 111 West 57th Street in Midtown West, Bloomberg reported. The write-off comes with an $82 million hit for the REIT.

During an earnings call this week, Apollo Commercial chief executive Stuart Rothschild cited the “velocity of unit sales” as a reason to lower expectations. While dialing back on timing, Rothschild said the firm was still “reasonably confident” regarding pricing at the 84-story tower.

Michael Stern’s JDS Development Group and Property Markets Group, the developers behind the project, didn’t respond to the outlet’’s request for comment.

The developers last year leaned on Apollo to refinance the property, scoring $239 million from the REIT. The loan retired $400 million in senior debt held by AIG’s real estate investment arm.

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Built above the landmarked Steinway Hall, the tower is the second-tallest residential building in the Western Hemisphere, reaching 1,428 feet above the original structure. The tower includes 60 residences, split between 14 in Steinway Hall and 46 full-floor and duplex units in the rest of the property.

In February, a penthouse at the property sold for $47.2 million, down more than $6 million from the asking price listed in the condo’s offering plan. Other prominent sales at the building include a penthouse deal for more than $50 million in October, as well a deal with Tik Tok investor Tim Gong paying $34 million for two units.

Corcoran Group took over sales at the building last February. In a statement to Bloomberg, Corcoran CEO Pam Liebman said a penthouse purchase is set to close next week and said the firm was “well positioned to enter a strong fall selling season.”

The luxury market has hit a snag in recent months. In the second quarter, Manhattan luxury sales were down nearly 40 percent year-over-year, according to a Miller Samuel report.

— Holden Walter-Warner

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Apollo Global ManagementBillionaires RowCondo MarketJDS Development GroupMichael SternMidtown WestNYC Luxury MarketProperty Markets GroupReal Estate Finance