Icon Realty Loan Workout Saves UES Multifamily Portfolio

Icon Realty Management is 2-for-2 this year on deal-saving loan modifications.

The rental landlord locked down a couple more years to pay off $109 million in debt tied to a 19-building Upper East Side apartment portfolio. Icon, headed by Terrence Lowenberg and Todd Cohen, had landed in default when it failed to refinance at maturity in May.

The workout gives Icon a May 2026 maturity date. But the extra time came at a cost.

Icon, in negotiations with special servicer CW Capital Asset Management, agreed to pay down the debt by $12 million, $6.5 million of which was due at closing, according to Morningstar Credit.

Lowenberg and Cohen, who did not return requests for comment, might have come up with the cash in part by selling 242 East 75th Street, one of the portfolio’s buildings, in mid-December to REDA Holdings for $6.9 million, PincusCo reported.

The $12 million paydown’s second installment — $1.5 million — was due after 242 East 75th Street was unwound from the mortgage, according to servicer commentary. The remaining $4 million is due in May.

The chain of events mirrors one earlier this year.

In April, Icon notched a two-year extension on a $143 million loan tied to 18 multifamily properties after getting flagged for maturity default a few months before.

The deal also required a pay down, and Icon sold 43 West 27th Street from the portfolio in June for $24 million, according to property records. Japanese dessert maker Taguchi & Co. was the buyer. Icon had sold 413 South Fifth Street, a Williamsburg rental property, for about $5 million a few months earlier.

The culprit for the twin defaults is unclear. Both portfolios are more free-market than rent-stabilized, an analysis by The Real Deal shows, limiting the impact of the 2019 rent law. The landlord dealt with high vacancy during the city’s Covid exodus but plugged those holes when renters streamed back in 2021.

Rising interest rates likely played a role. Even landlords who can refinance at today’s rates are requesting extensions in the hope that borrowing costs come down.