LoanCore Capital carried out its threat to make Dune Real Estate Partners sell a Plaza District office building, then bought it at the foreclosure auction.
The lender acquired 111 East 59th Street late last month, PincusCo reported. Dune defaulted on $193.4 million in loans, so LoanCore could bid with the debt it was owed. The deed transfer value, a technical matter, was $5 million.
A year ago, LoanCore sued the owners of the office and retail property to force a sale. A state judge ordered that sale after LoanCore filed to foreclose on the loan, which had an initial principal of $196 million.
LoanCore did not immediately respond to a request for comment. Dune could not immediately be reached for comment.
In 2015, Dune partnered with Princeton International Properties and Empire Capital Holdings to buy the 15-story, 200,000-square-foot building from Lighthouse International for $170 million. The joint venture planned to convert the lower floors to attract a big-box retail tenant.
Two years later, LoanCore provided a $195 million financing package. On top of a previous $103 million loan, the financing included a $50 million mortgage and several consolidations with existing loans. At the time, the owners were in the midst of a $20 million capital improvement, though the aim shifted from big-box retail to a medical facility conversion.
Princeton and Empire exited the picture in 2018.
LoanCore alleged Dune defaulted in September 2020. Other issues have emerged, including the expirations of a temporary certificate of occupancy and the building plumber’s insurance, which led to a stop-work order.
Tenants at the property include Premier Medical Group and a cashier-less Starbucks. It’s unclear what LoanCore plans to do with it.
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