Retail Owner Files Suit In Attempt To Maintain Control Of SoHo Space

New York retail owner Jack Terzi is trying to stave off a foreclosure auction at his property in SoHo where the lender claims he is millions behind in payments.

Lender Bethpage Federal Credit Union is planning a foreclosure auction Tuesday of the retail space at 349 West Broadway, The Real Deal reports. However, Terzi has filed a lawsuit as a last-ditch attempt to hang onto the property, per the publication.

The lender has accused Terzi of being $4M behind in repayments, but in this lawsuit Terzi argues the construction at the property made it impossible to lease the space since the previous occupant, a coffee shop, closed up permanently during the pandemic. He is also claiming that notice of default isn’t valid because it was sent by the lender’s legal counsel and not Bethpage itself, and that any sale should be delayed anyway until after construction wraps so it is not sold for less than its worth.

Terzi, the CEO of JTRE Holdings, has a New York City portfolio of more than 450K SF of commercial properties valued at more than $400M, according to his LinkedIn page. 

He is also facing lawsuits from lenders at retail sites at 63 Spring St. and 23 Wall St., per TRD. He is not the only owner facing challenges – Ashkenazy Acquisition Corp. is facing foreclosure on a retail space on Fifth Avenue in Harlem, while Vornado last year took a multimillion-dollar loss selling five poorly performing properties in prime New York City retail strips. 

The retail sector has been hit hard by the pandemic, as mandated closures and reduced foot traffic have pushed up vacancy and brought down rents across the city. In some cases, the value of retail properties has come down, and landlords and tenants are increasingly trying to find ways to work out creative leasing deals in order to keep space filled and rent paid.