TD Bank hit a group of investors, including billionaire Jeff Sutton of Wharton Properties, Eli and Jeffrey Gindi and brand investor Steven Russo, with a pre-foreclosure suit over mortgage default at a Midtown retail condo.
Investors took out a total of $20.3 million from lenders in 2013 for 15 West 34th Street, but despite several extensions, have failed to pay back $17.8 million by the late-April maturity date, the lender claims in the suit. The 5,700-square-foot retail condo was previously home to a Zumiez shoe store, and before that, an Aeropostale location. It is now vacant.
The suit highlights the challenges in the Herald Square retail corridor, which has struggled to maintain momentum in lease prices.
The strip of West 34th Street between Fifth and Seventh avenues has seen fading demand from fashion, arts and entertainment retailers, according to a recent report from the Real Estate Board of New York. The median asking retail rent was $438 per square foot in the second half of 2024, according to REBNY figures, a nearly 8 percent decline year over year. About 15 years earlier, rent for the retail space at 15 West 34th Street was about $500 per square foot.
Asking rents in the corridor fell fairly steadily from their peak in 2015 to 2021, and have since plateaued. The average asking rent is now 56 percent below that high.
The area has struggled to replace major retailers who have left in recent years. Forever 21 moved from West 34th Street to Seventh Avenue before the pandemic and has since closed all its stores as a result of bankruptcy. Geox closed its Herald Square location as it was ending U.S. operations last year. Victoria’s Secret shuttered its location on the corridor during the pandemic and then sued to be released from its lease.
However, there are signs of life for Herald Square. Old Navy signed the year’s largest retail lease earlier this month, taking out a 55,000-square-foot flagship space at 50 West 34th Street. The deal could represent a turnaround for the strip, where sister company Gap withdrew in 2018 as part of a major retail exodus. Old Navy’s former location at 150 West 34th Street is now leased by Irish discount retailer Primark. Vornado Realty Trust asked $10 million in rent for the property.
“The Old Navy lease is a very bullish attitude on the area,” said Richard Cohan, retail adviser for the 34th St Partnership. The corridor is also dominating in the beauty and skincare retail category, Cohan said, flanked by Ulta, Macy’s and Sephora flagships.
The mixture of declining rents and rising taxes can cause issues for landlords beyond just the nominal loss in income — they make it difficult to refinance. The assessed tax value of the 15 West 34th Street building declined by 11 percent for the 2025 tax year, according to city records, but bounced back up by more than 6 percent for 2026.
“The savvy building owners are reaching out to City Hall” about real estate taxes, Cohan said. “Now, I don’t believe City Hall has been that responsive.”
Wharton and its partners acquired the building in 2001, according to city records, for an unknown price. The retail condo is part of an eight-story building constructed in 1907, with a total of nearly 60,000 square feet.
Gindi Capital and TD Bank did not immediately respond to requests for comment. Sutton could not be reached for comment.
Read more
Old Navy inks year’s largest retail lease, breathes new life into stagnant Herald Square
Primark and Hobby Lobby led Manhattan’s top retail leases this year
Jeff Sutton on the deals that launched his multi-billion dollar empire
