NEW YORK CITY–Madison Realty Capital has acquired a defaulted $23.5-million note for the luxury waterfront development the Breakers at Sheepshead Bay in Brooklyn. A spokesman for MRC says that the New York City-based commercial real estate fund and asset management firm bought the non-performing note from TD Bank.
The note involves the unpaid principal amount on a loan to a local investment group led by Brooklyn developer Jacob Pinson. The note is secured by the remaining 49 unsold units and parking at the 75-unit Breakers development at 3112-3144 Emmons Ave. The overall loan purchase price between MRC and TD Bank was not disclosed.
According to Brian Shatz, co-founder and managing member of MRC, the project began construction in 2004 and was completed in 2009. However, the owner filed for bankruptcy in August of this year after foreclosure proceedings were initiated. He adds that the transaction was complicated and was completed in the short period of time required by TD Bank.
According to a Bloomberg report, Emmons-Sheepshead Bay Development LLC, the owner of the 49 unsold condominium units at the Breakers, filed for Chapter 11 bankruptcy protection in the New York Eastern Bankruptcy Court in Brooklyn on Aug. 30.
“As we have done with previous acquisitions, should we end up taking title to the property, MRC intends to tap into our vertically integrated platform of in-house construction, asset, and property management capabilities to maximize the property’s long-term value,” Shatz states.
Wilk Real Estate of Brooklyn, which has represented the Breakers development, lists some of the available units at the Breakers from as low as $389.000 to as high as nearly $1.37 million.
In September, MRC reported that it had closed six note purchase deals that included the acquisition of three non-performing loan portfolios and three defaulted notes that were secured by multifamily, mixed use, retail and industrial properties in Brooklyn, Queens, the Bronx and Manhattan.