search

The Real Deal Logo

Trending

It’s not just Arbor: Syndicator lender Ready Capital chokes on past-due debtIt’s not just Arbor: Syndicator lender Ready Capital chokes on past-due debtThere will be blood: Lenders warn of bank failures at TRD forumThere will be blood: Lenders warn of bank failures at TRD forumPinnacle Bank buys back Fort Worth office tower for $12 per sf Pinnacle Bank buys back Fort Worth office tower for $12 per sf Creditors close in on Charles Cohen’s 750 LexCreditors close in on Charles Cohen’s 750 Lex
Commercial
New York

Foreclosure auction set for former Playboy Club site

Saga of failed Midtown investment by BentallGreenOak, Capstone to end

Foreclosure Auction Set for Former Playboy Club Building
5 East 59th Street and Josh Zamir of Capstone Equities (Google Maps, Getty)

In two months, the glamour of the Playboy Club will give way to the harsh reality of a foreclosure auction.

A date has been set for the sale of 5 East 59th Street, ending a long saga for the former club venue. Marketing materials from JLL say the vacant, nine-story building just off Fifth Avenue will hit the auction block Jan. 17.

The Plaza District property, which has 45,000 square feet of rentable space for commercial or residential use, is owned by BentallGreenOak and Daniel Ghadamian and Josh Zamir’s Capstone Equities. They paid $85 million for it in 2015, with the Playboy Club gone and office tenants on the verge of leaving. They bought out the lease of the lone retail tenant, an Italian restaurant called Bottega del Vino, and set about repositioning it.

The buyers borrowed more money to turn it into an eight-story building for a single tenant, with retail and showroom space on the lower floors and offices above. There was speculation that it could rent for $10 million a year, but the grand plan did not come to fruition.

China Overseas Bank filed a foreclosure suit in November 2021, alleging the owners defaulted on three loans backed by the property. The largest was a $59 million acquisition mortgage issued in June 2015. Two construction loans were granted months later but all three matured in June 2021 without being repaid, according to the lawsuit.

Sign Up for the undefined Newsletter

With the property’s debt up to $70 million, a judge in February ordered the foreclosure sale to happen within a year, according to PincusCo. The building hasn’t generated revenue since the start of 2022, according to court filings.

Marketing materials for the property advertise a wide range of potential uses based on the site’s zoning, as well as its proximity to several prominent luxury retailers, including Bergdorf Goodman, Dior, Balenciaga and Balmain. It’s also not far from one of the world’s most prominent Apple stores.

Some 22,000 square feet of development rights remain untapped.

BentallGreenOak did not immediately respond to a request for comment. Capstone Equities could not be reached for comment.

The most recent iteration of the Playboy Club in New York City was on Manhattan’s West Side. It lasted just 14 months. 

Read more

Companies and People
BentallGreenOak
Tags
AuctionsForeclosures