Capstone Equities Buys Nonperforming Note on Brooklyn’s Whale Building

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The nonperforming note on The Whale — a recently renovated office building in Sunset Park, Brooklyn — just changed hands, Commercial Observer has learned. 

Joshua Zamir’s Capstone Equities purchased the roughly $70 million note at a “discount to par,” sources said, from lender TPG Real Estate Finance Trust. The exact discount couldn’t immediately be ascertained. 

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The sale was arranged by Newmark’s Adam Spies and Josh King, along with Cushman & Wakefield’s Daniel O’Brien. The sale closed late last week. 

Nightingale Properties is the Whale Building’s owner, having purchased the 500,000-square-foot former Whale Oil Company headquarters from Madison Realty Capital for $84 million in 2020, with plans to turn it into creative office space

At the time, Nightingale assumed the roughly $90 million in debt on the property, originated by TPG in 2018.

The building — at 14 53rd Street on the Brooklyn waterfront — includes 30,000 square feet of indoor and outdoor amenities, plus a shuttle to the subway. 

Its largest tenant is Soccerroof, an indoor soccer facility and event space that occupies 60,000 square feet on the building’s roof. In March, The Real Deal reported that tortilla producer Vista Hermosa had taken 30,000 square feet as a production facility for its Tacombi restaurant chain. 

The note sale was the subject of two recent lawsuits initiated by Nightingale. In complaints filed in Kings County Supreme Court, the firm alleged that Capstone interfered with a loan purchase between Nightingale and TPG that would have allowed Nightingale to buy back the $88 million in debt on the property at a $20 million discount — with Capstone entering into a separate agreement with TPG to purchase the debt instead. The case against TPG was dismissed but is now being appealed, sources said. The lawsuit against Capstone was partially dismissed but Nightingale’s claim for unfair competition is ongoing, sources said.

As the commercial real estate industry heads into what could be a tumultuous second half of the year, sources said that a number of note sales are starting to occur — and clear — in the marketplace, with plenty of interested investors on the sidelines.

Aareal’s nonperforming note on L&L Holding Company’s Metropolitan Tower at 146 West 57th Street is currently being marketed by the same Newmark team. 

Officials at Capstone and C&W didn’t return a request for comment. TPG, Nightingale and Newmark officials declined to comment. 

Cathy Cunningham can be reached at ccunningham@commercialobserver.com.