Hotel Developer Picks Up Bankrupt Chinatown Mixed-Use Building for $29M
Lam, the son of Lam Group head John Lam, picked up the completely vacant six-story building between Canal and Hester Streets from Gary Tse’s CTW in a deal that closed last week but was made public yesterday in state records.
Representatives from Lam Generation and CTW did not immediately respond to requests for comment.
The property, located near the base of the Manhattan Bridge, backs a $25.1 million commercial mortgage-backed securities (CMBS) loan held in LCCM 2017-LC26, according to data from Trepp. The loan defaulted in mid-2018 following a failed plan to transition the asset, according to servicer notes. The borrower filed for Chapter 11 bankruptcy in May 2019 to thwart a foreclosure filing by the CMBS trust, and the building was later marketed for sale via a 363 sales process.
Lam financed the purchase of the property with a $14 million loan from East West Bank, property records show. A spokesperson for East West did not immediately respond to requests for comment.
CTW bought the 46,000-square-foot 55-59 Chrystie Street — which was built in 1900 as a garment factory — for $1 million in 1982 and later invested about $5 million in tenant and capital improvements, as Commercial Observer previously reported. That work included converting the second through fifth floors from factory to office space in 2009 and more recently creating loft-life spaces to attract art and media tenants, and getting some of their older tenants to leave to make room.
The company got its 10-year, interest-only CMBS loan from Ladder Capital in 2017 but defaulted on it in August 2018, as CO reported. The property’s occupancy fell from 100 percent at origination to 41 percent in 2018 and, by 2019, it was completely vacant, CO and the New York Post reported.
In January, Rosewood Realty Group’s Greg Corbin put the property up for bankruptcy auction. Corbin did not immediately respond to a request for comment.
The building at 55-59 Chrystie Street also has a place in music history. Hip-hop group the Beastie Boys rented a full floor of the building in the 1980s and used it as its home, recording studio and “party palace,” Bowery Boogie reported. The group gave a shout-out to the property on their song “B-Boy Bouillabaisse” from their legendary album Paul’s Boutique.
Lam Generation has developed several hotels around Manhattan and most recently opened the doors to its Renaissance New York Chelsea Hotel at 112 West 25th Street in March, the New York Real Estate Journal reported.