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Nightingale loses one of last Manhattan properties

Namdar, Klosed Properties buying ground lease for $10M

<p>Namdar Realty Group CEO Igal Namdar and Nightingale Properties’ Elie Schwartz along with 20 East 46th Street (Getty, Namdar Realty Group, Nightingale Properties, Google Maps)</p>

Namdar Realty Group CEO Igal Namdar and Nightingale Properties’ Elie Schwartz along with 20 East 46th Street (Getty, Namdar Realty Group, Nightingale Properties, Google Maps)

Another Elie Schwartz property has flown the coop.

Nightingale Properties sold the ground lease of 20 East 46th Street in Midtown East for $10.4 million, Bisnow reported from property records. The acquisition, led by Namdar Realty Group and Klosed Properties, came via a deed-in-lieu of foreclosure.

The transaction was first reported by PincusCo.

Namdar and Klosed formed a joint venture that served as Schwartz’s lender at the office property. A year ago, the lender sued Schwartz and Nightingale over a $30 million loan backed by the building, three months after it purchased the property’s debt. Nightingale defaulted earlier in the year, when East West Bank held the loan, which carried a $26.2 million balance at the time.

The lawsuit called on the court to appoint a receiver to take possession of the property as the foreclosure unfolded. Nightingale bought the leasehold on the 15-story building for $28 million back in 2016, acquiring it from Extell Development’s Gary Barnett; there were 27 years left on the lease at the time.

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It’s unclear how many holdings Nightingale still has in New York; Schwartz did not respond to a request for comment from Bisnow or The Real Deal. The developer still owns at least five properties in Manhattan, according to a PincusCo database, spanning more than 1.1 million square feet.

The company has been forced into selling off assets after it was accused of misappropriating tens of millions of dollars from investors via the CrowdStreet crowdfunding platform. The developer reached a settlement to repay investors $4 million each quarter, but missed the second payment and hasn’t made one since, leading to further investor backlash.

Schwartz is also being forced to offload personal properties to make his investors whole. Over the summer, he listed his Lincoln Square penthouse for $19 million.

The Department of Justice and Securities and Exchange Commission are among those to investigate the developer’s alleged fund mishandling. 

Holden Walter-Warner

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