A&E Real Estate is facing a foreclosure threat on a massive multifamily portfolio that touches four of New York City’s five boroughs.
Wells Fargo, serving as trustee for the bondholders of a $506 million loan, filed a pre-foreclosure action against A&E, PincusCo reported. A&E allegedly defaulted when the loan matured. The loan is backed by 37 tax lots and roughly 3,500 residential units, including the 1,200-unit Riverton Square rental complex in Harlem.
JPMorgan Chase originated the loan in 2021, which was then securitized through a CMBS loan. The loan allegedly matured on June 9 and servicer KeyBank alerted A&E to the default two days later.
“This is part of an on-going negotiation with both the senior and the mezzanine debt holders that will be resolved in the next 45 days and does not affect the operations of the buildings,” A&E said in a statement to The Real Deal. “A&E has always made and continues to make interest payments and will continue to maintain the highest standards at these properties for our residents.”
Douglas Eisenberg’s firm bought the Riverton Square complex in 2015 for $201 million. At the time, Eisenberg agreed to keep 975 units affordable over 30 years in exchange for more than $100 million in tax breaks from the city. Eisenberg also pledged to spend $40 million in capital improvements.
The previous owner of the complex was Larry Gluck’s Stellar Management, which purchased the complex in 2005, only to slip into default on a $225 million mortgage and be foreclosed upon by its lenders. CWCapital took over the complex via auction in 2010.
Other properties covered by the pre-foreclosure action against A&E include a 200-unit building at 98-51 Queens Boulevard in Rego Park, a 41-unit building at 65 Ocean Avenue in Prospect Lefferts Gardens and a 62-unit building 909 Sheridan Avenue in Concourse Village.
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