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Thor Equities is facing “severe cash flow issues” at 545 Madison Ave., so the $30M commercial-backed mortgage security loan on the property has been sent to special servicing.
Barclays provided the loan, Commercial Observer reports, citing information from Trepp. Thor, led by Joseph Sitt, used the financing to buy the leasehold on property from BlackRock and LCOR in 2013 for $53M. Marx Realty owns the ground lease on the property.
While the ground rent has jumped by $450K, Thor is struggling with the occupancy at the building, according to Trepp, and Sitt's company is now having trouble meeting the debt.
Ground leases have caused problems for several New York City landlords. At the Chrysler Building, for example, the ground rent the previous owners were paying quadrupled between 2017 and 2018.
A source told CO that Thor does not control the property because it sold a 98% stake to a high net worth international investor who had invested through a trust, but the publication could not verify that information with any other source.
The debt at 545 Madison Ave. moving to special servicing comes just a month after Thor defaulted on a $37M loan on the property at 115 Mercer St. Last year, a mortgage Thor holds on an Upper East Side property went into special servicing, according to the Wall Street Journal.
Thor has been selling assets, but still owns about $5B worth of Manhattan properties. It had been planning an office and retail project in Red Hook, but has changed its tact there and is now pursuing a last-mile distribution center at the site.
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