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Nightingale Properties is facing foreclosure at yet another office building as a lender looks to take over the empty Wall Street building it co-owns with InterVest Capital Partners.
The mezzanine lender on 111 Wall St. has initiated a foreclosure auction on the 1.2M SF building, enlisting JLL to run the proceeding, which is set for Sept. 19, GreenStreet reports. Oaktree Capital Management holds a mezzanine loan for just under $100M on the building and set the action in motion with plans to leverage its existing debt to take over the property.
Representatives for JLL, Nightingale and InterVest did not respond to requests for comment by publication time.
Nightingale and InterVest — when the firm was named Wafra Capital Partners — paid $175M in 2019 for the leasehold interest in the 25-story, 1.2M SF Financial District tower, which Citigroup vacated that year. It then bought the fee interest on the property in 2021, paying $220M to Omnispective Management.
Pimco holds a senior mortgage on the property, which it provided in 2021 as part of a $500M financing package involved Oaktree, SKW Funding and Bain Capital, while Petros PACE Finance provided $89M as a commercial Property Assessed Clean Energy loan, the first of its kind in New York City.
The building is home to one of the largest empty blocks of office space in the city.
The foreclosure is the latest in a string of problems for Nightingale. The company and its CEO, Elie Schwartz, have been accused of misappropriating tens of millions raised through the crowdfunding platform CrowdStreet for office deals in Atlanta and Miami that never closed. An independent manager is investigating what happened to the money and put the entities created for the deals into bankruptcy July 14.
CrowdStreet is also considering appointing an independent manager to take over the entity that controls 200 West Jackson Blvd., a 480K SF office tower in downtown Chicago for which Nightingale raised $25M on the platform to buy in 2022, Bisnow reported this week.
Meanwhile, Nightingale's office property at 1500 Market St. in Philadelphia has been in receivership since April. Foreclosure auctions have been scheduled for next month for a 420K SF Sunset Park commercial building that Nightingale owns, as well as 300 Lafayette St., an office and retail property in SoHo.
CORRECTION, JULY 27, 12:30 P.M. ET: A previous version of this story incorrectly stated that the 111 Wall St. C-PACE loan was the largest in U.S. history. A larger C-PACE loan closed this month. This story has been updated.
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