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Jeff Sutton Facing Foreclosure On $300M Fifth Avenue Retail Loan

717 Fifth Ave. in Midtown Manhattan

One of the pre-eminent owners of retail on Fifth Avenue in Manhattan is facing foreclosure at a property leased to Dolce & Gabbana and Armani.

New York Life Insurance Co. filed a lawsuit this week against an LLC with the same address as Wharton Properties, alleging it failed to pay off a $314M loan that has matured, The Real Deal reports. The loan is attached to the retail and the office space 717 Fifth Ave., which Wharton Properties owns. (SL Green also owns a 10.92% stake in the property, according to a public filing.)

New York Life Insurance and TIAA provided two separate $150M loans on the property 10 years ago, and New York Life took over TIAA’s half last year, TRD reports. The lender accused the property owner of failing to meet its obligations when the $300M debt matured last month.

A spokesperson for the property owner called the filing "a technicality" in a statement to TRD, adding that the borrower and lenders on the property are actively negotiating an extension.  

Jeff Sutton's firm owns dozens of retail properties in some of the most popular shopping destinations in Manhattan, including along Fifth Avenue, 125th Street, 34th Street and Times Square. Wharton owns Prada’s flagship at 724 Fifth Ave. and, in another joint venture with SL Green, owns Nike's flagship store at 650 Fifth Ave.

Lenders have been largely patient with borrowers of high-profile real estate over the last few years, as the impacts of the pandemic and its associated prevention measures — like enforced store closures and a foreclosure moratorium — have played out in the market. Some lenders told Bisnow earlier this month they expect that patience to start wearing off.