Vanbarton Group Defaults On $87.5M Loan At Its Own Headquarters
The Vanbarton Group has defaulted on a loan covering 292 Madison Ave., a 26-story office building near Bryant Park that it has owned since 2016.
The investment company had until last month to pay off an $87.5M loan on the property from Deutsche Bank but has failed to make the necessary payments, The Real Deal reported.
The Vanbarton Group acquired the property for $180M and began renovations in the 200K SF property in 2018. The owner scored the Deutsche Bank loan in 2019, with a two-year term and three one-year extension options.
All three of those extension options covering the loan on 292 Madison have now been used up. Deutsche Bank came close to a restructuring deal for the loan with the landlord, but has now hired Newmark to sell the nonperforming loan, per TRD.
The Midtown East office tower serves as the headquarters for the Vanbarton Group and is roughly 70% occupied.
Vanbarton, Newmark and Deutsche Bank didn't immediately respond to Bisnow’s requests for comment.
Vanbarton, run by Richard Coles and Gary Tischler, has been one of the earliest landlords in New York City to move forward on converting commercial buildings to housing as the office market, particularly in aging buildings, continues to suffer from a lack of demand.
The developer is converting the 24-story 160 Water St. office building in the Financial District into a 30-story multifamily building with 588 apartments. It was among the first to receive permits from the city for a Midtown conversion at 980 Sixth Ave. into housing after its previous tenant, coworking giant WeWork, filed for bankruptcy and rejected its lease.
Its soured relationship with WeWork has also led to issues at a building it owns in Los Angeles. It has fallen 60 days delinquent on a $22M mortgage tied to 7083 Hollywood Blvd., which WeWork left in 2021, leaving it 84% vacant, Bisnow reported. That loan was moved to special servicing this month.
