Extell Facing Foreclosure on The Belnord’s Retail Condos
By Abigail Nehring July 16, 2024 4:13 pm
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There might be only foreclosures in this building’s future.
Flagstar Bank, a subsidiary of New York Community Bancorp, initiated foreclosure proceedings Monday against Gary Barnett’s Extell Development for defaulting on a $100 million mortgage tied to a pair of retail condominiums at the bottom of The Belnord, according to New York Supreme Court records.
The action on the mixed-use building at 225 West 86th Street — which serves as the exterior in Hulu’s “Only Murders in the Building” fictional series — was first reported by PincusCo.
Extell bought the landmarked 12-story building between Broadway and Amsterdam Avenue in 1994 and sold the residential portion to HFZ Capital in 2015 for $555 million, property records show. The upper floors have since been converted into condos.
But Extell hung onto some 65,438 square feet of retail space on the building’s ground floor and lower level and scored a $100 million loan from Flagstar in 2015.
However, a good chunk of the retail space has been vacant for years after Banana Republic decamped and moved across the street in 2012, as Commercial Observer previously reported.
Extell’s efforts to find tenants resulted in a small victory in 2023 when Starbucks inked a deal to open a 2,061-square-foot location at the building, which has an alternate address of 2360 Broadway.
City zoning laws are at least partially to blame for the vacancies, and Extell sought to remedy that last month by filing an application for a variance that would allow it to lease 4,639 square feet to an unnamed bank, as Crain’s New York Business reported.
In the interim, Flagstar said Extell defaulted on its mortgage in April and is now seeking to foreclose on the property, court records show. Flagstar also asked for the court’s approval to appoint a rent receiver while the proceedings, which are in the pre-foreclosure stage, play out.
Spokespeople for Extell and Flagstar did not respond to requests for comment.
Abigail Nehring can be reached at anehring@commercialobserver.com.
