Billionaires' Row in New York sees first mortgage default
Another luxury condo at Manhattan's One57 is scheduled for a foreclosure auction - the second time in a month that a property seizure is being sought at the Billionaires' Row tower following a mortgage default. And it might be the biggest in New York City residential history.
Apartment 79, a full-floor penthouse that was the eighth-priciest sold in the building, is scheduled for auction on July 19, according to real estate data firm PropertyShark. The owner of the condo, a shell company listed in public records as One57 79 Inc., bought the 580 sq m (6,240 sq ft) residence in December 2014 for $50.9m, according to New York City records.
In September 2015, the company took out a $35.3m mortgage from lender Banque Havilland SA, based in Luxembourg. The full payment of the loan was due one year later, according to court documents filed in connection with the foreclosure. The borrower failed to repay, and now Banque Havilland is forcing a sale to recoup the funds, plus interest.
"It's probably the most-expensive foreclosure we've ever seen in luxury development," said Donna Olshan, president of high-end Manhattan brokerage Olshan Realty Inc. "I don't know of a foreclosure that's larger than that."
Michael Lubben, a New York attorney who represents the borrower, according to court records, didn't immediately return a phone call seeking comment.
Built by Extell Development Co., One57 has stood as a symbol of Manhattan's luxury-development boom - and eventual slowdown. The tower, which broke ground in 2009, drew investors willing to pay large sums for lavish residences they rarely live in, and inspired other developers to build similar offerings, creating an effective 'Billionaires' Row' along West 57th Street.
One57 still holds the record for the most-expensive residential sale in New York, at $100.5m.
Last month, a June 14 auction was scheduled for a 56th-floor apartment at One57. The condo was purchased in July 2015 for $21.4m. Public records have yet to reveal any transfer of ownership for that property.
"This shows that too much leverage is probably not wise," Anna LaPorte, an Extell spokeswoman, said of the most recent default.
Until last month, no apartments on Billionaires' Row had previously been subject to a foreclosure auction, according to PropertyShark. Manhattan residential properties are rarely lost to creditors, with only 27 new residential foreclosures in the borough in the first quarter, the firm reported.