$100M CMBS Loan on Clipper Realty’s 141 Livingston Street Reinstated

The $100 million commercial mortgage-backed securities (CMBS) loan on Clipper Realty’s office building at 141 Livingston Street in Downtown Brooklyn has been reinstated, Commercial Observer has learned. 

After a short legal battle between the real estate investment trust (REIT) and the lender, a modification and settlement was negotiated by Iron Hound Management, sources familiar with the situation said, and a new five-year lease has also been signed with the building’s key tenant. As a result, the lender has now dropped all default claims on the loan, and “everyone has made peace,” a source said. 

David Bistricer, CEO of Clipper Realty, confirmed the resolution but declined to comment further. 

The CMBS loan was originated by Citigroup in February 2021, and matures in March 2031. 

The 15-story, 206,084-square-foot building is almost fully leased to the city. The New York Department of Citywide Administrative Services leases 96 percent of the building and utilizes it for the city’s civil court system, including New York City Civil Court and Kings County Civil Court.

With that lease expiring in December 2025 and court spaces being tricky to fill, the loan ran into trouble in September 2024 amid tenant uncertainty, as CO previously reported. It fell 30 days delinquent and was transferred to special servicer Midland Loan Services a month later. By March 2025, Wells Fargo — the trustee acting on behalf of the CMBS trust — started foreclosure proceedings on the 15-story building and a legal battle later ensued, Crain’s New York Business reported at the time. 

The city’s Department of Citywide Administrative Services had previously said it would renew its lease for two years, according to Crain’s, but the lender and borrower disagreed on whether the lease extension would satisfy the conditions set out in the CMBS loan documents. 

Now, a leasing agreement for an additional five years, sources said. 

The $100 million loan is split across the BMARK 2021-B24, BMARK 2021-B25 and  BMARK 2021-B26 conduit CMBS deals. Clipper Equity purchased the office tower in 2002, along with 250 Livingston Street, and completed a renovation of the former in 2004. 

Iron Hound declined to comment. 

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