Wells Fargo is poised to take over a six-story Herald Square building owned by one of New York’s most prominent retail landlords.

A partnership of  Jeff Sutton’s Wharton Properties has failed to make its mortgage payments at 11 W. 34th St., prompting the bank to initiate foreclosure proceedings, according to court records first reported by Crain’s New York Business.

Wharton told its lender it wouldn't be able to pay off the loan at maturity, triggering "optional default," according to Wells Fargo's foreclosure complaint, which means Sutton's firm is likely to relinquish the building, according to Crain's.

Wharton Properties, along with partners SL Green Realty Corp. and the Cohen family, took out a $23M mortgage on 11 W. 34th St. in 2015, property records show. The building's lower floors are leased to Foot Locker which, despite hundreds of closures nationwide, still operated the store as of this week.

But the owners could not pay off the debt in full by the January 2023 deadline, leading Wells Fargo to file foreclosure paperwork with the New York County Supreme Court on Monday. The loan behind the foreclosure filing was originally due to mature in 2021, five years after Wells Fargo originated it, but the landlords exercised a two-year extension.

SL Green and Wharton Properties have been in control of the 17K SF property since 2010, when the pair bought a distressed $12M mortgage covering the site. Now, Wells Fargo is looking to sell the property to make up for the lost cash and cover interest and attorney fees, according to the complaint.

The building is across the street from Macy's flagship and a block away from Penn Station and Madison Square Garden to the west and the Empire State Building to the east. Wharton Properties also controls five other retail properties along West 34th Street, its website shows.

Wharton Properties and SL Green didn't immediately respond to Bisnow's requests for comment.

The foreclosure shows that even the most successful investors aren't immune from distress caused by maturing loans in a high-interest-rate environment.

Sutton made waves this winter when his firm and SL Green sold the retail condo at 717 Fifth Ave. to Gucci’s parent company Kering for $963M, which immediately followed Wharton's sale of 720 and 724 Fifth Ave. to Prada for a combined $835M.

While Fifth Avenue is viewed as an area of Manhattan that has fully recovered from the pandemic, Herald Square is a different story with vacancies among the highest in the city.