In a high-stakes game of Monopoly using real buildings, the debt on Lever House at 390 Park Ave. was sold and the buyer is either cutting a deal with Aby Rosen or kicking his company, RFR Holding, to the curb.
Rosen and partner Michael Fuchs’ RFR Holding hasn’t paid the prominent building’s mortgage for so long, the lenders have been talking foreclosure for several years, leaving an opening for other players.
In December, rival developer SL Green Realty Corp.’s financing arm, Green Loan Services, was asked to become the mortgage’s special servicer by the main collateral holder — an unaffiliated third party, it confirmed, which requested a fair value appraisal for the mortgage that had about $83 million left to go.
On Jan. 18, documents show 390 Park Debt Acquisition Corp., believed to be a hospitality finance and management firm, purchased the mortgage for an unknown sum.
Jenel Management, with offices on the same floor, did not purchase the loan, the company told The Post.
RFR got into this mess because its 99-year ground lease on the landmark property has a rent reset in 2023. Until then, it pays $6.15 million per year, but the new tab is estimated at more than $20 million, based on a market appraisal slated for this year.
Even if RFR achieved higher rents from new office tenants, at $100 per square foot, it would only bring in $26 million — and real estate taxes are already $9 million a year.
Once the financiers decided RFR couldn’t cover the ground lease payments, the building was placed into special servicing. RFR couldn’t refinance the loan and stopped paying the current one.
At one time, RFR could have rejiggered its deal with the landowners, the Korein family’s Omnispective. The lease that started in 1999 had an initial 51-year term with four 12-year extension options.
But the Koreins became annoyed with RFR in 2013, sources said, after its mortgage at their other building, 608 Fifth Ave., was taken over by Vornado.
Putting more pressure on RFR, just last year the Korein family created another ground lease for Lever House to be operated by Brookfield and Tod Waterman the minute RFR’s gone.
The loan buyer could also work with Brookfield-Waterman but if it has a tenant at hand, steps into RFR’s position or came as RFR’s white knight, all bets are off.
And if RFR believes it can rent the building for more dough as offices or a hotel and pay the higher ground rent, it could keep the others at bay until the original lease ends in 2098.
None of the parties returned requests for comment.
The Chinese Year of the Pig starts next Tuesday but for New York state, it may be the year of the pot.
As the state legislature and governor start determining the shape of recreational marijuana, the holders of licensed medical cannabis facilities are still locating pharmacies.
The first downtown Brooklyn outlet for Columbia Care NY will open at 44 Court St., also known as the Temple Bar Building, opposite Brooklyn Borough Hall.
The 7,000-square-foot duplex will have 4,500 square feet on the ground floor and 2,500 square feet on the lower level. The asking rent for the ground floor was around $150 per square foot.
The Savitt Partners team of Michael Dubin and Hector Rodriguez represented Columbia Care in the deal while Craig Berman of Joseph P. Day negotiated for the ownership.
Memorial Sloan Kettering has just signed a lease for an approximately $65 million dedicated medical building that Billy Macklowe will develop on the Upper East Side.
Macklowe, head of William Macklowe Co. and joint venture partner LaSalle Development staked out the site at 333 E. 61st St. with a 99-year lease last year from the Redemptorist Fathers of New York for $25.25 million and then demolished the rectory.
After targeting the local hospitals, MSKC signed a triple-net lease for the 80,000-square-foot, six-story building being designed by Daniel Goldner Architects. Occupancy is expected in mid-2020.
Memorial Sloan Kettering was represented jointly by Mark Weiss and Rob Eisenberg of Cushman Wakefield along with Neil Goldmacher and Howard Kessler of Newark Knight Frank.
The William Macklowe Co. and LaSalle were represented by Bill Hartman of Cushman Wakefield. The asking rent was $70 per square foot.
