Gindis Face Potential Foreclosure Over Astor Place Starbucks

Eulogies poured in last summer for the Astor Place Starbucks as the cafe shut its doors last July after nearly three decades.

But the closed location is still serving up trouble for its former landlords as the commercial space is facing potential foreclosure.

Special servicer Rialto Capital alleges that Isaac and Edward Gindi, part of the family that owns Century 21 stores, failed to pay the lender $1.5 million when the chain closed the location, as well as put off condo charges and financial statements. The Gindis personally guaranteed the $26.7 million loan.

An entity connected to the family purchased the 5,800-square-foot commercial condo unit in 2004 for $13 million. That same year, Starbucks renewed its lease on the space for a 20-year term.

However, the coffee chain decided to shutter the store in 2024, and sent rumors flying about the company’s motivation. Managers whispered about a hike in rent, but the landlord told news outlets the price was unchanged. The New York Post highlighted the location’s “decrepit public bathrooms, napping homeless folks and indoor panhandling.” Starbucks was in the midst of fighting a national union campaign, one that workers at the East Village location had joined. The company reported basically flat revenue that year, along with declining comparable store sales. (Starbucks did not respond to a request to comment for this story.)

The loan entered special servicing a few months later, according to Morningstar Credit.

The foreclosure suit lists several events of default. The Gindis were required to deposit $1.5 million into the lender’s account if Starbucks pulled out as a tenant, but the borrowers failed to do so, the suit alleges. Edward and Isaac Gindi also allegedly failed to submit documentation about their net worth and liquidity as guarantors. Finally, the borrower allegedly failed to pay condo charges in 2024 to the tune of $36,000.

Attorneys for the Gindis, Terrence and Darren Oved of Oved & Oved, contested the claims.

“The bank’s allegations are legally defective, factually inaccurate and utterly disregard our client’s consistent good-faith conduct,” they said in a statement. “We will respond swiftly, strategically and decisively to protect them.”

Rialto Capital, the special servicer behind the suit, has faced accusations that it is manufacturing defaults on deals that are in good standing. The servicer is one-third of the venture managing the $17 billion commercial loan book of Signature Bank, which collapsed last year.

Rialto has said that it is abiding by the rules and has only enforced its rights and remedies in rare cases where sponsors defaulted and refused to communicate. An attorney for the plaintiff did not immediately respond to a request for comment.

Elsewhere in the Gindi family, Eli and Jeffrey Gindi were hit with a preforeclosure suit last month regarding 15 West 34th Street in the Herald Square area. Last year, the family finally settled an ongoing dispute with another member of the Syrian Jewish community, billionaire developer Ben Askenazy.