Bluestone Group acquires defaulted 1M sf Gans portfolio debt for $147.8M

By Adam Pincus

The Bluestone Group acquired the senior debt secured by lumber yard and strip club owner Robert Gans’s 1-million-square-foot portfolio of commercial buildings on the West Side, in Soho and in Queens, for $147.76 million, according to court records and sources.

The sale closed on April 15, according to a source familiar with the transaction. The seller was Mack Real Estate Credit Strategies. PincusCo reported in January that Bluestone had signed a purchase option to acquire the debt. 

In 2018, Mack provided $130.2 million of senior financing (which was later reduced to $116 million) and Bluestone provided a $17.76 million mezzanine loan that “almost immediately went into default,” according to court filings. The initial maturity date for the mezzanine loan was October 1, 2020.

Then in October 2021, Mack filed to foreclose on the loan, which it had declared was in default.

Bluestone acquired control of one of the original 11 properties, 533 West 27th Street, through a UCC foreclosure auction in August 2021.

The remaining properties secured by the debt are 175 Spring Street, 616-624 11th Avenue, 610 West 46th Street, 616-620 West 46th Street, 603 West 45th Street, 613-615 11th Avenue, 617 11th Avenue, 623 11th Avenue, 108-02 Merrick Boulevard and 108-16 Merrick Boulevard.