The Ohebshalom family, one of New York’s more controversial landlord clans, is facing foreclosure on its Midtown headquarters after allegedly defaulting on a $12.6 million mortgage tied to 226 East 54th Street.
LBC2 Trust, an entity affiliated with Minnesota-based Stillwater Asset Management, filed suit this week in Manhattan Supreme Court, claiming Fred, Benjamin and Jonathan Ohebshalom failed to pay off the loan when it matured in October despite three prior extensions, Crain’s reported. The family still owes about $10.1 million, according to court filings.
Stillwater is asking the court to authorize a public auction if the debt isn’t repaid.
The nine-story, 31,000-square-foot building sits between Second and Third avenues and houses Sky Management, the firm that operates many of the Ohebshaloms’ apartment holdings. Other tenants include Trooper Fitness and FiftyFour NYC, a bar mitzvah venue.
The property is 96 percent leased, boasting asking rents around $40 per square foot, according to CoStar data cited by Crain’s.
The family has a history of skirting close to the edge with lenders and city regulators alike.
In 2022, Stillwater brought a similar foreclosure action over the same property before striking a deal that extended the payoff date by two years. The Ohebshaloms have also racked up numerous city violations across their multifamily portfolio for elevator breakdowns and other maintenance issues.
Jonathan Ohebshalom, reached at Sky Management, declined to comment to the publication.
The Midtown property has changed hands — mostly within the family — over the years. Records show the Ohebshaloms acquired it in 2007 for $7.7 million through Majestic Realty Associates, then sold a 50 percent interest to Gemini Partners Realty for $7.3 million in 2016; Fred Ohebshalom was listed as manager of both entities.
Sterling National Bank originated the $12.6 million mortgage in 2018, which was later assigned to Stillwater after Webster Bank’s merger with Sterling in 2022.
— Holden Walter-Warner
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