Capstone Equities Acquires 140 Crosby Street for $51M

Capstone Equities has taken ownership of a SoHo office building after moving to foreclose on it last year.

Capstone-linked entity CE 140 Crosby Owner acquired 140 Crosby Street for $51.4 million from MC 19 East Houston, an entity tied to Madison Capital, according to city records made public Tuesday. 

The 35,000-square-foot Class A office building — also known as 606 Broadway and 19 East Houston Street — is bounded by East Houston and Prince streets in the heart of SoHo’s retail corridor. 

Current retail tenants at 140 Crosby include Citizens Bank and electronics store JBL, but the offices above were largely empty as of last August, when Capstone filed a foreclosure lawsuit against former co-owners, Madison Capital and Vornado Realty Trust. The developers had previously defaulted on the property’s $75 million mortgage debt, which Capstone acquired in July, The Real Deal reported. 

Capstone completed the foreclosure acquisition this month with a $39.6 million agreement with Prime Finance, according to city records. The loan consolidated prior mortgages and a new gap mortgage into a single lien. The agreement detailed an outstanding principal of $34 million on the property, and included a gap mortgage for $5.53 million.

Madison and Vornado constructed the six-story office and retail building at 140 Crosby from the ground up in 2019. Five years later, with the development failing to find its footing and a default on the horizon, the developers marketed the building for sale at $100 million, TRD reported, but failed to find a buyer. 

A spokesperson for Vornado declined to comment. Capstone, Madison and Prime Finance did not immediately respond to requests for comment.

Emily Davis can be reached at edavis@commercialobserver.com.