Lender accuses Thor of abandoning historic Scribner Building  

Suit claims Joe Sitt’s firm refused to put money into the property

Suit Accuses Thor Equities of Abandoning Scribner Building
Thor Equities' Joe Sitt and 597 Fifth Avenue (Thor Equities, Google Maps, Getty)

Charles Scribner’s Sons published Ernest Hemingway, F. Scott Fitzgerald and Kurt Vonnegut’s works, but in recent years, the company’s former headquarters has become a story of its own.

Since Scribner departed decades ago, the 12-story building at 597 Fifth Avenue has been an office for Anthony Weiner’s mayoral campaign and another scandal-tarnished tenant, Cambridge Analytica.

Now the historic building is nearly vacant. A court-appointed receiver claims its owner, Joe Sitt’s Thor Equities, has abandoned the property, along with an adjacent building on 48th Street, after falling into default on a $105 million loan in 2020.

Thor left the properties’ operations to its mezzanine lender, SL Green, in 2021. But both firms have refused to put money into the buildings, the receiver alleged in a recent lawsuit in New York.

The properties require major repair. The Scribner Building’s facade is deteriorating and it needs over $1 million to fix its fire sprinkler system and water tanks.

Thor and SL Green did not return requests for comment.

The saga shows what can happen when an owner essentially walks away from a building with both CMBS debt and mezzanine debt.

Thor bought the Scribner Building along with 3 East 48th Street for $108.5 million in 2011. Three years later, it refinanced with a $105 million CMBS senior loan and mezzanine loans from SL Green and Oxford Properties.

The Scribner Building’s key retail tenant, Sephora, departed in 2017. Lululemon came in on a short-term basis, left in 2019 and was replaced by Club Monaco, which remains a tenant.

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Both 3 East 48th Street and 597 Fifth Avenue did not have much luck leasing their office space. Only about a quarter of their space is occupied, and at least one tenant lacked a lease, according to a court filing.

After Covid hit, Thor defaulted on its loan. SL Green, the mezzanine lender, stepped in and tapped CBRE as the property manager. 

But things did not get any better under SL Green, according to the lawsuit. The properties’ revenue barely covered the operating expenses, let alone the loan payments.

Tenants owed $7 million in rent, but neither SL Green nor Thor made an effort to collect the delinquent payments. The unpaid rent equated to about three years of lost revenue, according to the senior loan’s special servicer, which got a judge to appoint a receiver in June.

Moreover, the buildings have used a non-compliant fire sprinkler system since 2018, leading to $10,000 in violations. The receiver estimated repairs to a water tank and fire sprinkler system will cost at least $1.5 million.

In February, a trust on behalf of the CMBS bondholders filed a foreclosure lawsuit alleging Thor owed $124 million on its loans, including principal and interest. The receiver is looking to sell the properties. 

The 12-story Scribner Building was designed by Ernest Flagg and built in 1912 as the home of a bookstore for the publisher. Flagg once called the Beaux Arts style building “the best thing I ever did.’”

Thor has over $20 billion in assets under management, according to its website. In recent years, it sought to pivot from high-end retail to logistics. Sitt also has made a long shot bid for one of New York’s three downstate casino licenses, proposing a $3 billion development in Coney Island.

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