Nathan Berman, the man with a (conversion) plan, is facing the threat of foreclosure at one of his Financial District sites.
The special servicer of a $265 million securitized loan filed a pre-foreclosure action against Metro Loft Management at 180 Water Street on Wednesday, PincusCo reported. The complaint was filed in U.S. District Court by special servicer CWCapital Asset Management.
The court filings were the next step after KBRA revealed in November that Metro Loft was on the verge of defaulting on the $265 million mortgage backing the property. Metro Loft allegedly defaulted on the senior loan at the beginning of that month, according to the complaint.
A $100 million mezzanine loan was also expected to mature in November, but that debt is not referenced in yesterday’s complaint. That month, Berman told Crain’s that the firm was “working things out with both lenders,” but didn’t add anything further.
Metro Loft did not immediately respond to a request for comment from The Real Deal.
In 2017, Berman paid $450 million to buy partner Vanbarton Group out of the rental property. That was three years after Metro Loft purchased a minority stake and two years after the partners began a $100 million conversion of the property.
The 573-unit, 460,000-square-foot conversion was completed and opened in 2017. Occupancy was 98 percent as of the KBRA report and the average rent was $4,800. Amenities include a 1,200-square-foot courtyard and an indoor pool.
Deutsche Bank originated the $265 million senior mortgage in 2019, portions of which were collateralized in commercial mortgage-backed securities. Wells Fargo was assigned the mortgage as trustee of the debtholders.
Deutsche also originated the mezzanine debt before Rockwood Capital took control of the loan in 2019.
Berman’s firm is one of the biggest players in office-to-residential conversions in New York City. In January, Metro Loft and David Werner scored a $135 million loan from the Northwind Group for the conversion of the former Pfizer headquarters in Midtown Manhattan.
But Berman has also faced his fair share of struggles. Over the summer, for instance, Metro Loft disclosed that it wouldn’t be able to repay a $250 million loan backing the conversion at 20 Broad Street when the debt matured the following month.
— Holden Walter-Warner
Read more
Nathan Berman’s Metro Loft faces default at 180 Water Street conversion
David Werner, Metro Loft land $135M loan for Pfizer HQ conversion
Metro Loft won’t repay mortgage coming due at 20 Broad Street
