Lender Looks To Foreclose On Tin Pan Alley Landmarks Owned By Family Of Yair Levy
The family of Yair Levy, who was once banned from selling co-ops and condominiums in New York, is facing foreclosure at multiple NoMad properties after falling behind on debt payments.
The owners of five interconnected buildings at 45, 47, 49 and 51-55 West 28th St. were the subject of a pre-foreclosure action filed by Wells Fargo, acting as trustee for the CMBS trust that owns the $19.3M loan backing the properties, PincusCo reports.
Wells Fargo is seeking $21.2M as part of the action, which accounts for past-due interest and default interest as well as the outstanding balance on the loan, which was issued in 2018, according to the complaint filed in the U.S. District Court in Manhattan.
Wells Fargo named Galit Levy and Raphaela Levy, the daughters of Yair Levy, as defendants in the suit as they were the guarantors on the loan, which was provided by Societe Generale and sold into the UBS Commercial Mortgage Series 2018-C11 trust.
The borrowers and a special servicer reached a forbearance agreement on the properties in 2021 after the pandemic impacted tenants' ability to pay rent, but the lawsuit claims the borrowers failed to meet their debt repayment obligations.
The special servicer, listed as LNR Partners in the Morningstar Credit database, notified the borrowers of the default in July and accelerated the debt due as a result.
"On the introductory call, borrower had indicated that they would bring the loan current in the near term and provide all the necessary documentation demanded by the SS," the special servicer wrote in loan commentary, according to Morningstar. "However, to date, borrower has neither provided any documentation nor a proposal to cure ongoing defaults, and as such, counsel has been directed to initiate foreclosure and seek the appointment of a receiver."
The properties are low-slung commercial buildings known as Tin Pan Alley — known for the famous American songs written inside their walls — and were set to be converted into condos, per reports. Those plans fizzled after five of the properties became city landmarks in 2019.
"Here, composers, arrangers, lyricists, performers, and printers came together as collaborative firms and revolutionized the music industry's practices for the production and promotion of popular music," the city's Landmarks Preservation Commission wrote at the time. "Such iconic songs as 'Take Me Out to the Ball Game' and 'God Bless America' were published on 28th Street while the sheet music business boomed here at the turn of the 20th century."
Yair Levy, who amassed a New York City portfolio worth $2B before the Great Recession, was banned in 2011 from selling condos and co-ops in New York after he court found he had spent a condo conversion fund on personal expenses. He maintained at the time that he used the money for the building, located at 225 Rector Place.
He told The New York Times in 2014 he was planning a return to real estate with a focus on retail and smaller renovations. In the interview, he said he acquired the Tin Pan Alley buildings for $22M.
"For the time being we keep it as retail. We have some rental apartments upstairs. But the focus was on the retail. We’ve already replaced almost all the commercial tenants and we raised the rent. We’re getting about $120 a foot," Levy told the Times about the buildings. "The apartments upstairs, we didn’t start to rent yet, but we are planning to get about $60 a foot. We bought a few tenants out. We’re planning to stabilize the building and maybe if we can, we’re going to fix it and keep it as is for the time being. In the future, this can be a development site."
The Tin Pan Alley buildings span 34K SF and were 95% occupied when the loan was issued in 2018. The borrowers hadn't submitted updated financial records for the property since June 2020, according to servicer commentary from June 2023.
