Sites In NYC, Jersey City Planned For 1,000 Units Offered In Bankruptcy Sale
Two unfinished developments that were placed into bankruptcy last year are heading to the auction block.
Affiliates of Manhattan-based developer HAP Investments that own sites in Washington Heights and Jersey City filed for bankruptcy in November, and those sites are now up for sale as part of that process.
Hilco Real Estate has been tapped to market the unfinished apartment building at 4452 Broadway in Manhattan to buyers with bids due March 13, the Illinois-based firm announced in a news release.
The 129-unit project, which Hilco says is about 50% complete, has been appraised for $56M and can make use of a 35-year tax abatement. The building is also slated to include 65 parking spaces and two ground-floor commercial spaces.
HAP secured a $52.5M construction loan from Madison Realty Capital for the building in 2019, The Real Deal reported. As part of the ownership entity's bankruptcy plan, the lender on the building has agreed to accept a $25.5M payment from the sale of the project to release its claim against the bankrupt estate. The lender could also submit a credit bid at the auction, according to the Chapter 11 plan filed in bankruptcy court.
The bankruptcy petition was signed by Nir Amsel, the Israel-based co-founder of HAP Investments. Eran Polack, HAP's U.S. CEO, told Bisnow he is no longer involved with the project. The phone number on HAP's website has been disconnected.
The other property is a development site at 500 Summit Ave. in Jersey City's Journal Square district, which includes five parcels HAP acquired for a combined $23.5M in 2016, according to the Reonomy property database.
HAP planned to develop a 42-story, 903-unit project on the site, as well as a 1-acre park and a community center. But those plans never got off the ground, and the entity that owns 500 Summit Ave. was placed into bankruptcy in November, on the same day as 4452 Broadway.
The 0.8-acre site was appraised for $108M and is being offered as is, according to Hilco. Its zoning also allows for retail, office and hotel uses. Bankruptcy documents show the lender, also Madison Realty Capital, has agreed to accept a $32.5M payment from the sale or refinancing of 500 Summit.
Bids on that parcel are due May 2. All sales are subject to approval by the U.S. Bankruptcy Court for the Southern District of New York.
"Considering the city of New York continues to grow and invest in its own welfare, the bankruptcy sales of these two properties present an outstanding opportunity for an astute investor to stake their claims in areas that are poised for growth," Hilco Executive Vice President Jeff Azuse said in a statement. "Being able to purchase these fully entitled properties allows the potential buyers more of their resources to develop each of the projects without having to go through the entitlement process."
Fred Ringel, an attorney with law firm Leech Tishman who is representing HAP in the bankruptcy, didn't respond to Bisnow's request for comment. A representative for Madison Realty Capital didn't immediately respond to a request for comment.
HAP has developed more than 1M SF of largely multifamily projects, mostly focused in Manhattan. Polack said the company isn't shutting down despite its phone number being disconnected, but he declined to comment further.
