RFR Slapped With Another Foreclosure Suit At A Manhattan Property
After years of allegedly failing to cover property taxes at 90 Fifth Ave. in Union Square, RFR is facing a potential foreclosure of the 122-year-old building.
Special servicer Rialto Capital Advisors has filed a foreclosure complaint against RFR and its principals, Aby Rosen and Michael Fuchs, on behalf of the CMBS trust that holds a mortgage tied to 90 Fifth Ave., a 140K SF office building near Union Square.
Rialto claims in the suit, filed in New York Supreme Court, that RFR defaulted on the $104.5M loan when it failed to pay the building's property taxes on time each of the past three years.
The loan has been in special servicing since March because of the tax default, but a Fitch Ratings report on the CMBS loan from October noted that the mortgage was more than 90 days delinquent at the time.
The latest special servicer commentary, dated Feb. 1, notes that the loan “remains in default” and that the lender “continues to evaluate collateral, along with litigation, including potential receivership & foreclosure.”
An RFR spokesperson didn't immediately respond to Bisnow’s requests for comment.
The building, at the corner of West 14th Street, was constructed in 1903, and RFR paid $37M to acquire it in 2000 and later spent $10M on upgrades. It was 91% occupied as of April, according to Fitch, although its largest tenant, Compass, recently vacated the building before its lease expires in May.
The foreclosure suit is the latest turn in a tumultuous chapter of RFR's long history of investing in some of New York's most prominent buildings.
RFR lost a long-running legal feud over control of the Chrysler Building at the end of January. The owner of the ground lease, The Cooper Union School, successfully evicted RFR over $21M in unpaid rent.
The eviction followed a string of foreclosure notices filed at other RFR properties, including 475 Fifth Ave., the retail units at 188 E. 78th St. and the office building at 285 Madison Ave.
But RFR has also scored some wins over the same period. It is close to sealing the deal on a $1.2B refinancing for the Seagram Building, its trophy office tower on Park Avenue that is 96% occupied.
It also landed a three-year extension on a mortgage covering its 42-story office tower at 17 State St. in Battery Park City at the end of last year. It was also facing a foreclosure suit at that building from Rialto.
