Blackstone, Rialto Push To Foreclose On McGraw-Hill Building After Signature Bank Loan Default
Blackstone Group, through its loan servicer, Rialto Capital Advisors, has filed to foreclose on the McGraw-Hill Building, the property backing a loan that Blackstone and Rialto acquired from the failed Signature Bank.
The case against the building's owner, Deco Tower Associates, consists of two separate court filings. The first is a foreclosure filing on a $115M mortgage that Signature Bank provided in May 2019. The second is a money judgment for a $25M construction loan Signature Bank gave in February 2022, but the lenders in that case aren't seeking foreclosure.
PincusCo first reported the filings.
Alex Schwartz of ASI Management is identified as a guarantor of the $115M loan. On the $25M loan, Shlomo Wyler is a guarantor and Schwartz is the signatory, according to PincusCo.
The construction loan was provided to fund the conversion of more than a dozen floors of the building at 330 West 42nd St. from office to residential. The landmark tower spans more than 650K SF.
Resolution Real Estate has been overseeing the project on behalf of owner Deco Tower Associates but wasn't named in the filings.
Blackstone and Rialto did not immediately respond to Bisnow’s request for comment. Schwartz was not able to be reached.
In a statement, a Blackstone spokesperson said that the firm continues “to engage with borrowers to find the best resolutions possible.”
In December, the Blackstone and Rialto joint venture acquired a 20% equity stake in a venture holding approximately $17B of Signature Bank’s commercial real estate loan portfolio. The portfolio comprises more than 2,600 first mortgage loans on retail, market-rate multifamily and office properties primarily in the New York metropolitan area.
In the deal, Rialto acts as the loan servicer and operating partner, while Blackstone is the lead asset manager of the portfolio. Canada Pension Plan Investment Board also invested in the loan portfolio.
Other borrowers that took out loans with Signature have similarly defaulted and found themselves in Rialto’s crosshairs. In April, RFR’s Aby Rosen and Michael Fuchs, also former Signature Bank borrowers, landed in default on promissary notes after Rialto began servicing the loans, The Real Deal reported.
