George Comfort & Sons escapes foreclosure on Westchester office campus

$134M refinancing deal staves off aggressive mezzanine lender

Tri-State /
Oct.October 25, 2021 05:50 PM
The Centre at Purchase and George Comfort & Sons CEO Peter Duncan (George Comfort & Sons)

The Centre at Purchase and George Comfort & Sons CEO Peter Duncan (George Comfort & Sons)

It was a close call.

George Comfort & Sons’ last-ditch refinancing effort has kept its Westchester office campus from being foreclosed by its mezzanine lender, an affiliate of Oaktree Capital Management.

The $134 million refinancing deal that rescued the Manhattan-based landlord’s Centre at Purchase office campus consists of a $105 million mortgage loan from Bank of America and a $29 million mezzanine loan from real estate lender RCG Longview, according to George Comfort & Sons.

The loan replaces $132 million in debt — a $94 million mortgage and a $38 million mezzanine loan — issued by JPMorgan in 2017, a decade after George Comfort & Sons, in partnership with New York-based real estate investment firm O’Connor Capital Partners, acquired the 686,000-square-foot property at 1, 2, 3, 4 Manhattanville Road in Harrison for $166 million from Related Properties.

JPMorgan then sold the mezzanine portion to Oaktree.

The 2017 loan’s initial maturity date was August 2019, but the owners exercised their right to extend the term by two years. By June 2021, they were negotiating potential refinancing deals with Bank of America and Citibank.

But the appraisal that they needed to refinance went awry when one tenant downsized and another failed to file a notice of renewal, causing a projected $900,000 reduction in an annual rental income. Refinancing deals on the table fell apart and the owners had to start from scratch, according to court documents.

The owners let the lenders know that they needed more time to refinance. They didn’t get it.

Just a week after the loan’s maturity date, on Aug. 16, Oaktree moved forward with a UCC foreclosure process, setting up a Sept. 20 auction to snatch the owners’ equity interest in the property.

The owners filed a lawsuit against Oaktree on Sept. 16, seeking an injunction. They argued that a foreclosure would be unreasonable because the property’s appraisal was $172 million, much more than the total loan amount, and that they had potential lenders lined up for refinancing but needed more time.

“Plaintiff has never missed a payment on the mezzanine loan,” their lawsuit stated. “Plaintiff has diligently and successfully pursued refinancing in order to satisfy the outstanding indebtedness, and will continue to make monthly interest payments in the brief period until the refinancing can be closed.”

The court then set up a hearing for the morning of the auction date. Apparently, that prompted the parties to discuss a resolution outside the court. The auction did not happen.

With the refinancing done, the lawsuit was discontinued last week. Oaktree declined to comment.





    Related Articles

    arrow_forward_ios
    Westchester estate breaks local sale-price record: $11.3M
    Westchester estate breaks local sale-price record: $11.3M
    Westchester estate breaks local sale-price record: $11.3M
    Scott Rechler’s RXR gets mega-refi for Yonkers project that proved critics wrong
    Scott Rechler’s RXR gets mega-refi for Yonkers project that proved critics wrong
    Scott Rechler’s RXR gets mega-refi for Yonkers project that proved critics wrong
    Jeff Bezos and the Jersey City office property (LoopNet, Getty)
    Amazon scraps 400K sf Jersey City office deal
    Amazon scraps 400K sf Jersey City office deal
    Development trio wagers $150M on Newark’s struggling office market
    Development trio wagers $150M on Newark’s struggling office market
    Development trio wagers $150M on Newark’s struggling office market
    Namdar Group nabs $96M from Scale to build 800 Jersey City apartments
    Namdar Group nabs $96M from Scale to build 800 Jersey City apartments
    Namdar Group nabs $96M from Scale to build 800 Jersey City apartments
    Moishe Mana, Eugene Lemay and the Mana Contemporary (Getty, Wikimedia)
    Moishe Mana employee indicted in $7.8M tax avoidance scheme
    Moishe Mana employee indicted in $7.8M tax avoidance scheme
    Galleria at Crystal Run at 1 Galleria Drive with Pyramid Management Group CEO Steve Congel (PyramidMG, Google Maps)
    Mall owner Pyramid Management reaches settlement on defaulted loan
    Mall owner Pyramid Management reaches settlement on defaulted loan
    George Comfort & Sons’ Peter Duncan (right), Philip Morris International CEO Jacek Olczak and 677 Washington Boulevard in Connecticut (George Comfort & Sons, Philip Morris, Google Maps)
    George Comfort & Sons signs Philip Morris as Stamford tenant
    George Comfort & Sons signs Philip Morris as Stamford tenant
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...