3 Nolita Rental Buildings Up For Auction After Lender Forecloses
Three mixed-use properties in Manhattan’s Nolita neighborhood are headed to auction after a judge signed off on a special servicer’s attempt to foreclose on the properties.
Veracity Equities, an owner and developer run by Edmond Li, is 121 days delinquent on payments for a $41M loan covering three of its properties, PincusCo first reported.
The three walk-up properties — 31 Prince St., 46 Prince St. and 48 Spring St. — amount to a combined 48 rental apartments, including six rent-regulated units, plus eight retail spaces, The Real Deal reported.
The loan was transferred to special servicer Rialto Capital Advisors in December 2020, with Rialto filing pre-foreclosure papers in July 2022, per TRD. Residential and retail occupancy had dropped in the three properties to 91% and 75%, respectively.
The appraised value of the three combined properties was $66M when the loan was first issued, in March 2018, and is now just $49.5M, TRD reported. Lenders have reportedly also filed pre-foreclosure actions on six other Veracity-owned properties, with two currently in receivership, according to PincusCo.
New York City’s tight rental market has seen skyrocketing rents over the past year, with one unit at 48 Spring St. on the market for more than $7K a month in rent, according to a listing on StreetEasy that Veracity’s website links to.
Rents for Manhattan apartments hit new highs again last month, reaching the highest median rent on record, data from Douglas Elliman showed. Vacancy remained tight, rising from 1.9% a year earlier to just 2.5% in April 2023 and Manhattan renters paying an average of 9% above the asking price for rentals.
But those record rents haven't prevented distress from starting to pop up among multifamily owners. The Federal Reserve raised interest rates by 5% over the past 16 months, which has made it difficult for owners of buildings with maturing loans — especially those with rent-stabilized units — to find financing. More than $9B of multifamily loans in New York City set to mature in the next 24 months are "at risk," according to a Trepp analysis.