The palatial apartment atop 172 Madison Avenue was dubbed “Le Penthouse.” Perhaps “Le Revenant” would have been more appropriate — and not just because Leonardo DiCaprio lived in the building while filming a movie by that name.
Five years after its signature unit hit the market with the highest price tag in the city, $98 million, the condominium project, like the film’s central character, is clinging to life.
A foreclosure auction for Yitzchak Tessler’s unsold units is scheduled for June 4, according to documents obtained by The Real Deal.
Such an outcome would have been hard to imagine in 2018, when DiCaprio rented a unit in the 33-story, 72-unit tower while shooting “The Revenant,” a movie in which he’s left for dead after being mauled by a bear.
It appears 172 Madison is in a similar predicament. Distressed real estate investor ArcPe is foreclosing to recover $62 million in debt secured by the two unsold commercial units and the 10 remaining unsold residential units. Le Penthouse and several other sprawling, upper-floor pads are among them.
What went wrong? Tessler did not immediately respond to a request for comment.
“I personally don’t think it’s slow sales,” said ArcPe managing partner David Gordon. “More than anything right now, I just think he has the penthouses he wants to finish and a lack of money to finish them.”
The defaulted debt consists of $44 million in principal and $18 million in interest. ArcPe bought it in January from Deutsche Bank.
“Le Penthouse” spans nearly 20,000 square feet across three stories, though it was initially slated for five. The 26-room home comes with 4,500 square feet of outdoor space, including a pool and a hot tub.
“The ultra-luxury market always has wealthy buyers ready to buy a dream,” former listing agent Raphael Sitruk, then with Keller Williams, told TRD when it listed.
Five years later, the unit remains empty and unfinished, according to Gordon. Its asking price was slashed to $76 million in 2020. He said the unit and the building were drastically overvalued by Tessler.
“Any property anybody owns, they always think it’s worth more than it really is,” he said. “Even your own personal home.”
Tessler Developments could stall the UCC foreclosure sale, which is to be held by Mannion Auctions, by putting the ownership entity into bankruptcy. Tessler’s LinkedIn page, which links to a nonexistent company website, says it has “achieved wonders in its short tenure,” including luxury developments at the Textile Building, the Bryant Park Hotel, 150 Nassau Street, 260 Park Avenue South, 240 Park Avenue South and the Windsor Park.
Tessler landed a $94.5 million refinancing for 172 Madison from Deutsche Bank in 2018, replacing previous debt including a $164.3 million inventory loan from private equity firm TPG and Deutsche Bank.
At the time, 32 units were unsold and Corcoran had taken over sales from Compass, which resigned after an apparent dispute, possibly over pricing. “At the request of our team, we made the unusual decision to resign the project,” the brokerage had said in a cryptic statement.
It’s been a busy week in New York for Miami Beach-based ArcPe, which also moved to foreclose on a $3 million loan at 25 West 51st Street, according to documents reviewed by TRD.
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