SL Green Moves To Foreclose On Thor's Fifth Avenue Office Building
Thor Equities has defaulted on loan payments it owes for its building at 590 Fifth Ave., and its lender, SL Green, is moving to foreclose on it as a result.
Thor, run by founder and CEO Joe Sitt, took out a $25M mezzanine loan with SL Green on the property, but unpaid rents from several tenants there has meant it missed payments, Business Insider reports.
An auction for the property, which is also subject to an $83M senior mortgage, is set for Oct. 15. Tenants in the building include Knotel, which is one of the companies that has not been paying rent, BI reports. The flexible workspace provider is reportedly on the hook for unpaid rent in multiple locations, and has been sued by several landlords seeking recompense.
Thor's 19-story building is on a prime stretch of Fifth Avenue that has been struggling, and the situation has only been made worse during the coronavirus pandemic.
Though many believe it still carries the cachet of years past, retail experts argue asking rents need to come down significantly for the area to survive.
It is not the first time Thor has been unable to meet obligations at its properties. Late last year, it was sued for not paying ground rent at 545 Madison Ave. In May 2019, the commercial mortgage-backed loan the company had on the property was sent to special servicing.
A month earlier, Thor defaulted on a $37M loan on its property at 115 Mercer St. Thor, which made its name with retail property in the city, has been looking to change course. This time last year, it launched Thor Sciences, a life sciences-focused arm starting off with the $152M purchase of The Center of Excellence, a 784K SF campus in Bridgewater, New Jersey. It has also launched a new arm devoted to e-commerce industrial properties.
A representative for Thor declined to comment to Bisnow.
If SL Green were to win the auction, it would then be on the hook for the debt payments on the senior mortgage, and would likely have to spend money to make the building appeal to new tenants, particularly at its empty retail space. The Manhattan-focused REIT is facing its own liquidity challenges, and it is currently marketing loans and buildings it owns for sale.