Brooklyn investor Isaac Hager could lose his marquee Brooklyn asset.
G4 Capital initiated a Uniform Commercial Code foreclosure on 200 Kent Avenue, a 132,000-square-foot commercial building anchored by Trader Joe’s.
The lender provided a $84 million loan to Hager’s Cornell Realty Management in 2020 to finish the five-story mixed-use property. G4 claims the debt has grown to $140.5 million, which includes default interest.
Hager and G4 did not immediately return a request to comment.
Greg Corbin, president of Northgate Real Estate, is spearheading the marketing for the U.C.C. foreclosure. Matthew Mannion of Mannion Auctions is the auctioneer. An auction date is set for January 23.
The building has struggled to lease space and is under 50-percent occupied. It also has 186 parking spaces, a rarity in Williamsburg.
Under Mayor Eric Adams’ the City of Yes rezoning plan, the second floor parking lot could be used as a 22,000-square-foot community space. The third floor could also become a high-end restaurant or nightlife spot, according to Corbin.
Some of the building’s troubles appear to be traced back to Hager’s dispute with Trader Joe’s.
The landlord filed a lawsuit earlier this year alleging the grocer failed to pay rent since the store opened in late 2021. Hager sought $5 million in back rent, alleging Trader Joe’s commenced a confidential arbitration, which Hager’s lawyer called “a transparent attempt to conceal its corporate greed from the public record.”
But Trader Joe’s claimed the landlord failed to finish the building by its expected completion date in 2019. The Hager-linked entity that owned the property also failed to properly maintain the building, according to Trader Joe’s. In 2022, a fire sprinkler flooded the store two times in a five day span. Trader Joe’s blamed the landlord, claiming these costs totaled about $114,00 in repairs and cleanup costs. The dispute was discontinued in March.
Cornell acquired the property for $33 million in 2016. A year later, the firm scored a $64 million construction loan from Madison Realty Capital. Asher Abehsera’s LIVWRK partnered with Cornell in 2017 to lead its design and leasing.
Hager, a long-time outerboro investor, lost a few projects during the pandemic, notably the Tillary Hotel in Downtown Brooklyn.
He appears to have bounced back and has found new sources of capital. Last week, Hager partnered with Shiya Labin to acquire an office condo building at 1000 Dean Street in Crown Heights for $32.5 million from Meadow Partners and LIVWRK. Last year, he also teamed up with entrepreneur Daryl Hagler and paid $42.4 million for a Crown Heights site where Ian Bruce Eichner’s Continuum Company sought to build a 1,500-unit residential development.
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