Lender Seeks To Foreclose On 10-Story Union Square Office Building
The owner of a 10-story, Class-C office building close to Manhattan’s Union Square is facing foreclosure to the tune of $10.5M, according to a complaint filed in New York County Supreme Court Tuesday.
Landlord Bijan Nassi, who appeared on New York City Public Advocate Jumaane Williams’ worst landlords list last December, owns the office and retail building at 99 University Place, but is facing a pre-foreclosure motion by Florida-based BD Notes LLC, which purchased the mortgage backing the building from Bank OZK on Oct. 6, according to property records.
Nassi was named as a defendant, along with 99 University Corp., the LLC he controls that owns the property built in 1900. The mortgage was originally issued in 2012 by Intervest National Bank, which Bank of the Ozarks acquired in 2015.
In the suit, BD Notes alleges that Nassi paid the property’s mortgage late every month for 12 months beginning in September 2021, incurring late fees and additional fees that it has yet to pay.
The property is home to luxury streetwear and sneaker retailer Concept’s flagship store, which has 2,500 SF at the base of the building and opened in December 2020, New York YIMBY reported. Other tenants include a handful of medical offices, an architecture firm and a physical therapy clinic, according to listings on Google Maps.
But approximately half of the property is currently vacant: In spite of Union Square’s burgeoning status as a tech hub in Manhattan drawing a variety of new tenants to the area, the 41K SF building has approximately 20K SF available to lease, according to LoopNet.
While office buildings have yet to experience a wave of distress similar to what retail and hotel owners dealt with in 2020, delinquency rates on office CMBS loans have started to tick up in recent months as more companies are shrinking space and relocating to newer buildings as their leases expire.