Finance  ·  Distress

Nonperforming $111M Senior Loan on 462 Broadway Hits the Market

Foreclosure action commenced at the Meringoff property late last year after its lender claimed the firm hadn’t made payments in months

reprints


The CRE Finance Council conference may be popping off in Miami, but some sources’ minds were still firmly on activity in the Big Apple. 

The $110.6 million nonperforming senior loan on 462 Broadway is being marketed for sale after the borrower — a company tied to Meringoff Properties — defaulted on its debt, sources told Commercial Observer. 

SEE ALSO: Slate Property Group, LibreMax Capital Lend $60M on Astoria Condo Tower

Aareal Bank (ARL) is the property’s lender, and its note is now being marketed by Newmark (NMRK)’s Adam Spies, Adam Doneger, Jordan Roeschlaub, Dustin Stolly and Chris Kramer

A spokesperson for Meringoff did not respond to a request for comment. Spokespeople for Aareal and Newmark official declined to comment.

The six-story, 165,000-square-foot office and retail property sits at the corner of Broadway and Grand Street in the heart of Manhattan’s SoHo neighborhood, and is currently 84 percent leased. Meringoff has owned the 140-year-old building since 1981. 

Aareal gave Meringoff two loans in 2016 for a combined $135 million, which were later combined into a single mortgage, and provided another $14.3 million in 2022 for Meringoff to add a roof terrace to the property, Crain’s New York Business reported.

However, Aareal began foreclosure action against Meringoff in late November, claiming Meringoff hadn’t made loan payments for months leading up to the default, according to Crain’s

The A note now being marketed was scheduled to mature in April 2024 but accelerated in September 2023 due to payment default, sources said. The $38.7 million B note is owned by private equity firm PCCP.

One source at the CREFC conference who is bidding on the loan sale said they expect a lot of competition for the trade. “It’s a beautiful building,” they said. 

The same Newmark team is selling the debt on 229 West 28th Street on behalf of Aareal. That transaction is said to be under contract and expected to close later this month, according to sources.

Cathy Cunningham can be reached at cunningham@commercialobserver.com. Nicholas Rizzi can be reached at nrizzi@commercialobserver.com.