Joseph Moinian is in danger of being posterized by his lender.
Special servicer LNR Partners and trustee Wilmington Trust are moving to foreclose on the Moinian Group’s Midtown properties at 535-545 Fifth Avenue, according to a lawsuit filed in state Supreme Court. The plaintiffs allege Moinian defaulted on a $310 million loan covering the pair of properties.
The plaintiffs initiated a foreclosure action against the borrower and mortgagor of the first mortgage lien on the properties, according to the lawsuit, which also names Joseph Moinian as guarantor of the loan.
Morgan Stanley originated the loan in February 2015. A consolidated, amended and restated promissory note was subsequently split into multiple promissory notes and assigned through interim lenders to Wilmington Trust.
The lawsuit alleges Moinian failed to make the payment due on the maturity date of March 6. Four days later, Wilmington Trust — acting as trustee for the mortgage — provided written notice of default. The unpaid principal balance is $310 million, plus accrued interest and default interest.
The mortgage agreement allegedly allows for the appointment of a receiver in the event of default. In addition to the primary foreclosure, the plaintiff also seeks to foreclose on personal property tied to the loan, as the mortgage allegedly granted a security interest under the Uniform Commercial Code for items such as furniture, machinery and other personal property located within the buildings.
Moinian did not return a request for comment from The Real Deal.
The property at 535 Fifth is a 36-story, 330,000 square-foot tower; 545 Fifth is a 14-story, 180,000 square-foot building. The buildings counted a combined 93 percent occupancy rate as of last summer, according to KBRA.
But a few notable issues have popped up at the property in recent years. In June 2020, Moinian sued NBA Media Ventures, claiming it owed $1.9 million in back rent on its $625,000-per-month lease for the store it occupies at 545 Fifth. The lawsuit was ultimately settled.
Court filings from the case revealed the store’s struggles, accumulating losses of more than $20 million since it opened in 2015, according to a May 2020 email from an NBA attorney to the Moinian Group. The NBA signed a 20-year lease for the store in 2014, taking up 25,000 square feet.
In the spring, the $310 million loan was transferred to special servicing, according to a KBRA report. At the time, Moinian told Crain’s that the firm expected to refinance the mortgage in the near future.
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