Finance  ·  Distress

$28M CMBS Loan Secured by Manhattan Mixed-Use Property Sent to Special Servicing

Argentina’s Neuss family bought the 112-year-old mixed-use property in 2016

reprints


The $27.5 million loan tied to 20 West 37th Street, a mixed-use Manhattan property owned by the Neuss family of Argentina, has been sent to special servicing, according to a Trepp alert. 

Trepp stated that February remittance data noted “legal action against the property due to funds from a different property owned by the same sponsors possibly being misapplied.”

SEE ALSO: Madison Realty Capital Adds Samir Tejpaul to Lead Capital Markets Business

The 12-story property was built in 1912 and spans just over 85,000 square feet. New York City property records indicate that Juan Jorge Neuss of the Neuss Group, a 120-year-old Argentinian investment conglomerate, purchased the building for $27.5 million through an LLC in a deal financed by Goldman Sachs (GS) in November 2016. 

The loan was then placed into the GSMS 2017-GS5 conduit commercial mortgage-backed securities (CMBS) deal, accounting for 2.86 percent of the transaction’s collateral. 

Its loan first fell into special servicing due to monetary default in 2020 during the COVID-19 pandemic, according to Trepp, but was returned to a master servicer following a loan modification agreement. 

Between then and now, the loan has been the subject of several Trepp reports. The CMBS data firm reported in April 2023 that the property’s value had fallen from $54 million to $35.2 million, that debt service coverage ratio (DSCR) had been below 1.0 since 2020, and that DSCR had been negative for the first nine months of 2022. Occupancy in the building stood at only 54 percent in April 2023, according to Trepp. 

As of February 2024, the 12-unit retail and office building has nine vacancies, according to PropertyShark

The Neuss family has been plagued by negative headlines in recent years. In 2020, family patriarch Jorge Justo Neuss, 73, shot and killed his wife Silvia Saravia and then turned the gun on himself inside their Buenos Aires estate, as reported by The DailyMail. The murder-suicide was followed by news the next year that Rialto Capital foreclosed on the firm’s 10-story office building at 33 West 46th Street in Manhattan, which was being managed at the time by the estate of Jorge Justo Neuss.

Neuss Capital did not respond to requests for comment.  

Brian Pascus can be reached at bpascus@commercialobserver.com