Crown, Morgan Stanley Fund Face Pre-Foreclosure at 170 Broadway

Crown Acquisitions and PPF Retail, a Morgan Stanley real estate adviser fund, might lose their retail condominium unit in the Financial District.

The two firms are facing foreclosure at the 16,135-square-foot retail condo at 170 Broadway after allegedly defaulting on a $70 million loan for the property, according to a filing last week in New York State Supreme Court.

PNC Bank’s Midland Loan Services, the special servicer, filed the pre-foreclosure action after the mortgage was transferred to special servicing in February, Crain’s New York Business reported.

Spokespeople for Crown, Morgan Stanley and PNC did not immediately respond to requests for comment.

Crown and the Morgan Stanley fund bought the retail unit from the Carlyle Group in May 2014 for $70.1 million, PincusCo reported.

Clothing retailer Gap, which signed a lease for the three-level retail space in March 2014, currently occupies the space but will likely move out once its lease expires in 2030, The Real Deal reported.

The moveout is likely due to Gap’s rent-related lawsuit with the owners during the COVID-19 pandemic, when the retailer sued to block a lease termination at the property after previously closing its 170 Broadway location in response to a state mandate to shut down nonessential stores, according to TRD.

The retail space at the 19-story building on the corner of Broadway and Maiden Lane sits below the Marriott Residence Inn, which opened in 2014.

News of the potential foreclosure also comes just a few weeks after Crown, led by the Chera family, sold its commercial building at 38-02 Junction Boulevard in Corona, Queens, to nonprofit Midwood Development Corporation for $23.4 million, as Commercial Observer previously reported.

Isabelle Durso can be reached at idurso@commercialobserver.com.