September 3, 2010, by Sara
In happier times for the commercial real estate market, the Moinian Group was one of many landlords that decided a facade facelift on one of its properties could do wonders for its bottom line. The beneficiary was 1775 Broadway, aka 3 Columbus Circle, where Moinian planned to give the old masonry a glassy $70 million new cover. The market had other ideas, and soon Moinian couldn’t even pay the electric bill. A missed cry for help?
Maybe, because Deutsche Bank has sued for foreclosure on the building, Bloomberg reports. Moinian stopped making payments on the $250 million mortgage in January. Since the tower is only 23 percent occupied, it doesn’t have the funds to pay off the debt. Perhaps it would like that flesh-eating virus to finish it off now.
Deutsche Bank Seeks to Foreclose on NYC Tower After Moinian Stops Payments
By Oshrat Carmiel and John Gittelsohn – Sep 3, 2010
A unit of Deutsche Bank AG sued to foreclose on the Manhattan office tower that formerly housed Newsweek magazine, claiming that developer Joseph Moinian failed to repay a $250 million mortgage.
Moinian Group stopped making payments on the mortgage on 1775 Broadway in January, according to the lawsuit filed today in State Supreme Court in Manhattan. The lender, German American Capital Corp., demanded in March that the loan be paid in full.
“Despite due demand, full payment has not been made,” according to the complaint.
The 26-story tower is 23 percent occupied and its cash flows are insufficient to cover debt obligations, according to special servicer data compiled by Bloomberg. The property, located south of Central Park, is undergoing a $70 million renovation and has been renamed 3 Columbus Circle. Newsweek moved its headquarters from the building last year.
Moinian declined to comment, said Roxanne Donovan, a spokeswoman for Moinian Group. Robert Abrams, an attorney at Katsky Korins LLP, which represents German American, also declined to comment.
Moinian built a 20 million-square-foot empire of mostly New York commercial properties after a stint in the city’s garment industry. His holdings include a stake in Chicago’s Willis Tower, formerly known as the Sears Tower, the tallest building in the U.S.
The case is German American Capital Corp. v. Devash LLC, 651434/2010, New York State Supreme Court (Manhattan).