The owner of a mixed-use property in a prime Williamsburg location filed for bankruptcy last week on the same day a foreclosure auction was to take place.
Rudy Gabsi’s LENY Group put the entity that owns 190 Berry Street into bankruptcy protection, hoping for another shot at refinancing the debt on the property.
An auction had been scheduled for the 40-unit apartment building and adjoining retail buildings after LENY Group defaulted on the mortgage, which has a balance of almost $70 million, according to bankruptcy court documents. The bankruptcy filing was first reported by PincusCo.
“The ultimate goal of the bankruptcy proceeding is to renew negotiations for a restructuring of the mortgage debt pending further stabilization of the property,” said a declaration filed by Ephraim Diamond on behalf of LENY in bankruptcy court.
Although LENY is “currently unable to pay all mortgage arrears and debt service in full each month, the property retains the ability to regain rental income beginning in 2025 after various tax abatements expire,” Diamond said in the declaration.
The property’s J-51 tax abatement, which requires at least half the apartments to be affordable, runs out in 2025.
The building has 40 loft apartments with 10-foot ceilings, according to marketing materials from Eastdil Secured. The property was converted in 2009 from separate commercial warehouses to connected residential and brick & beam loft retail properties.
The six adjacent buildings sit on a prime corner of north 3rd and Berry streets and include the addresses 188-190 Berry Street and 103-113 North Third Street, the location of the popular Radegast Hall & Biergarten.
All of the addresses are included in the marketing materials for the foreclosure auction. It’s unclear whether the North Third Street buildings are part of the bankruptcy filing, which only lists the address 188-190 Berry Street.
Eastdil Secured’s Gary Phillips declined to comment. Diamond and the LENY Group did not immediately respond to requests for comment.
LENY Group purchased a majority stake in a Brooklyn portfolio that included the Berry Street property from Joel Schreiber’s firm, Waterbridge Capital. In 2016, it took out a $82 million mortgage on the property from Deutsche Bank. An entity of Waterfall Asset Management took over the loan in 2020.
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