Aby Rosen’s RFR and Vanke Face Foreclosure at Midtown Condo Development
By Nicholas Rizzi April 21, 2021 1:49 pm
reprints
The joint partnership of RFR Holding and Vanke US — which has been duking it out in court recently — now faces foreclosure at its luxury residential condominium development at 100 East 53rd Street, court records show.
Industrial and Commercial Bank of China (ICBC) filed a lawsuit in New York County Supreme Court on Tuesday to foreclose on the property, also known as 610 Lexington Avenue, after the partnership defaulted on its $360 million construction loan last year, according to the complaint.
Representatives from RFR and Vanke did not immediately respond to requests for comment. ICBC declined to comment.
Vanke and Aby Rosen’s RFR, under the ownership company 610 Lexington Development LLC, defaulted on its construction loan led by ICBC once it matured in May 2020, according to court documents. The bank sent nearly a dozen letters to the partnership to pony up the outstanding balance of the loan, but they have failed to do so and stopped paying real estate taxes in the summer.
The partnership now owes ICBC $270 million, which includes the unpaid balance of the loan and interest, court documents show.
The foreclosure attempt is the latest twist in the legal drama between RFR and Vanke US — the U.S.-based subsidiary of one of the largest residential developers in China, Vanke.
RFR and Vanke teamed up to buy the Midtown site in 2014, with plans to build a luxury condo building with retail and restaurant space at the base. Today, Vanke owns a 93 percent stake in the partnership, while RFR has a 7 percent stake.
The pair secured a $360 million construction loan from ICBC in 2015 and launched sales in 2016. Construction finished in 2019, but the development struggled to attract buyers, which only got worse once the coronavirus pandemic hit.
In October, RFR sued Vanke claiming that it “pulled the rug out from under” RFR, after one of Vanke’s affiliates acquired a $115 million controlling interest in the construction debt without notifying RFR, Crain’s New York Business reported.
Vanke shot back the next month with a countersuit to remove RFR as the partnership’s managing member entirely, claiming that the developer engaged “in a pattern of behavior designed to harm the company with a goal of obtaining a buy-out of its own interest at an exorbitant rate.” Earlier this month, Vanke filed another suit against RFR, accusing the company of missing nearly a dozen capital calls for the project and now owing Vanke nearly $700,000.
The 100 East 53rd building isn’t the only one in RFR’s portfolio that the developer is in danger of losing.
Last week, Solil Management sued to end RFR’s ground lease at the historic Gramercy Park Hotel after it fell into default and RFR let the property “fall into a state of utter disrepair,” according to court records.
