Uri Mermelstein’s High Rock Holdings seems to be making a last-ditch try to take care of management of its Midtown office-to-resi venture.
An entity tied to the workplace portion of 609 Fifth Avenue filed for Chapter 11 chapter safety in federal court docket in Manhattan on Wednesday, someday earlier than a scheduled UCC foreclosures public sale on the fairness pursuits within the workplace portion of the property. A chapter halts a foreclosures.
The id of the mezzanine lender and the quantity of the mezzanine debt are usually not recognized. The developer owes $71.8 million in senior debt, in accordance with the UCC sale notice, which was first reported by PincusCo, together with the Chapter 11 submitting.
“When a course of turns value-destructive, Chapter 11 offers the borrower the flexibility to reset and drive towards the highest-value end result for its lender, lien holders, and buyers,” mentioned Leo Jacobs, an legal professional representing High Rock within the chapter. “Reposition, restructure, reset.”
Valley Nationwide Financial institution supplied an $80 million acquisition mortgage in 2022 when High Rock, together with its accomplice RJ Capital Holdings, purchased the previous WeWork area in 2022 for $100 million from SL Inexperienced.
The developer reportedly deliberate to construct luxurious residential condos. In 2023, RJ Capital filed plans to transform the 14-story business right into a 29-story mixed-use property with 76 residential models that might double the peak of the constructing to 400 ft.
The workplace portion of the constructing has been sitting empty since WeWork vacated its lease in 2021. The constructing’s retail area, owned by the Reuben Brothers, was anchored by Puma’s flagship retailer. In February, Puma was compelled to close down the store till additional discover due to water harm within the constructing attributable to a burst pipe, WWD reported.
Reuben Brothers sued the upstairs landlord and RJ Capital’s Michael Abramov on March 2, alleging he breached his fiduciary duties by failing to pay roughly $468,000 in steam fees owed to Con Edison. The unpaid payments led to a building-wide steam shutoff and prompted the pipes to freeze and burst, the swimsuit alleges.
The chapter submitting estimates belongings between $50 million and $100 million and liabilities between $10 million and $50 million.
Mermelstein and Abramov couldn’t instantly be reached for remark. A dealer for the mezzanine lender, GW Property FZE, declined to remark.
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