RFR Receives Lifeline at Upper East Side Retail Site

RFR Holding is getting a reprieve on the Upper East Side — at least temporarily — after its lender abandoned a foreclosure case in favor of selling the debt.

Meadow Partners purchased the $10.5 million loan backed by RFR’s 404 East 76th Street and 1460 First Avenue, PincusCo reported. The East 76th Street property features retail space — partially occupied by a Manhattan Schoolhouse preschool — office and garage units, while the First Avenue building is a 10-unit residential walkup.

The properties span 27,000 square feet of built space and also feature more than 10,000 square feet of additional air rights.

Before Meadow purchased the loan, Blackstone was pursuing foreclosure on a trio of commercial condominium units attached to the properties. Blackstone filed its pre-foreclosure action in November, alleging RFR was in default of a loan originated by Signature Bank back in 2015.

The foreclosure case was discontinued in May, however, and the loan sale to Meadow closed during the first week of June.

It’s unclear why Meadow decided to acquire the loan and whether or not it can try to resume the foreclosure case against RFR. The lender declined to comment to The Real Deal.

Foreclosure has stalked RFR in recent months, both on a professional and personal level. In April, Korean investment firm Daol Asset Management seized 285 Madison Avenue from RFR at auction after it provided $200 million in mezzanine debt for the Midtown office tower.

The building is a strong performer: it’s 96 percent leased and bringing in nearly three times as much revenue as expenses, according to Morningstar. But those expenses don’t include debt service, which crippled RFR.

That same month, Citibank filed a foreclosure suit against RFR co-founder Michael Fuchs, alleging he stopped making monthly mortgage payments on the West Village condo he purchased from comedian Seth Meyers in 2008.

Last month, Meadow entered into contract to buy 200 Lafayette Street from Brookfield for $40 million, The Real Deal reported. The Soho retail and office space counts Eataly and Moncler among its retail tenant roster.

— Holden Walter-Warner