Crown Acquisitions Defaults, Could Lose Financial District Building After Gap Skips Rent

170 Broadway In Manhattan

Crown Acquisitions says it is facing foreclosure at the downtown property it leases out to Gap because the retailer is not paying rent.

The company, run by the Chera family, has defaulted on its $70M mortgage at the retail condominium at 170 Broadway, The Real Deal reports, citing court documents.

Crown, which co-owns the condo with Morgan Stanley, has requested mortgage relief that it has not been granted. Last month, special servicer Midland Loan Services informed Crown it was in default because it didn’t make the payment for May. Crown Chief Operating Officer Brittany Bragg said in the court filing that the firm is now facing “irreparable harm of losing” the building and is subject to foreclosure.

Gap Inc. has nearly 3,000 retail stores around the country under its various subsidiaries, including Old Navy and Banana Republic, and stopped paying rent back in April. It has since been sued by multiple landlords, including Simon and Brookfield, for failing to meet its obligations.

Gap has sued Crown, claiming it shouldn't have to pay rent because the location was forced to close under stay-at-home orders in New York state. Crown claims Gap had been trying to get out of that lease well before the coronavirus crisis. Other retailers have tried similar tactics, including Valentino, which sued over its lease on Fifth Avenue, claiming the address is no longer prestigious enough.

Crown is certainly not the only landlord dealing with unpaid rent from commercial tenants in the city. Only 17% of restaurant and bar tenants paid full rent last month, and landlords have said multiple major retailers have been shirking their rent obligations around the country.

Contact Miriam Hall at miriam.hall@bisnow.com.

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