1 representation of St. Mark’s Square; Madison Realty Capital Managing Principals and Co-Founders Josh Zegen and Brian Shatz (LinkedIn)
Madison Realty Capital has taken steps to foreclose the leasehold portion of Real Estate Equities Corp. Taken at 1 St. Mark’s Place in the East Village.
New York City-based Madison has owned the $ 48 million loan package backed by REEC’s East Village property since 2019. The real estate private equity firm acquired the debt from South Korean financial services firm Hana Financial Group, which provided REEC with $ 79.1 million in debt, and sold the $ 48 million stake in Madison Realty Capital.
Madison filed a complaint with the Manhattan State Supreme Court alleging that REEC was in default on the $ 48 million mortgage that combines an acquisition loan and a home loan.
“We are working on a recapitalization plan and are optimistic that this will be resolved in the near future,” a REEC spokesperson told The Real Deal.
The state has extended its Covid-19 moratorium on evictions and foreclosures for commercial property owners to August 31. Madison Realty Capital, which declined to comment, stated on the file that it had not received a hardship statement from the borrower.
In 2017, REEC paid $ 150 million for a 99-year lease on a three-parcel conglomeration at 1 and 3 St. Mark’s Place and 25-27 Third Avenues, TRD reported.
REEC plans to build a nine-story, 68,000-square-foot boutique office building to attract tenants who pay prime rents. The location is across Third Avenue from 51 Astor Place by Minskoff Equities, where the IBM Watson Group is headquartered.
The office availability rate in Manhattan is at a record high of more than 17 percent. But many property developers and landlords say that high-quality office products in sought-after locations should still be able to attract tenants.
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