Courts roundup: $36M W’burg pre-foreclosure; $26M EB-5 investor suit; Croman allegedly owes rent

$36M pre-foreclosure filed on Williamsburg commercial: The entity 185M Holdings, LLC, which shares an address with One William Street Capital Management, filed to foreclose on a loan with an original principal of $36 million provided to Acuity Capital Partners and secured by 185 Marcy Avenue, a 57,425-square-foot commercial building in Williamsburg, Brooklyn.

Please note that in this and every court case, the allegations made by a party are not necessarily accurate and complete. In addition, in many cases a lender is obligated to file a foreclosure action before the lender and borrower can renegotiate terms. The borrower in this action has not yet filed response papers.

We are reporting this case because it is a significant loan in a prominent neighborhood in Brooklyn.

Acuity bought the building in February 2017 for $29.95 million, borrowing $15 million at the time. The debt was more than doubled by late 2018, after the tenant Brooklyn Financial Group took 20,000 square feet in the building with an asking rent of $55 per foot and another tenant, the Leaning Experience, took 10,000 square feet according to a report at the time.

Cantor Commercial originated the $36 million loan in December 2018, which was immediately assigned to One William Street Capital Management, a Midtown-based asset management firm. One William Street sold the loan on April 6 to 185M Holdings LLC, which filed to foreclose on the loan the next day, April 7. 185M Holdings LLC has an address which is the same as One William Street Capital Management. The 2018 loan matured on January 7, 2022, according to the complaint, and the lender declared the loan in default. Case LINK

Chinese, Indian EB-5 investors sue HFZ, Ziel Feldman, seeking $26M: Plaintiffs are EB-5 investors in HFZ Capital Group’s 76 11th Avenue, the XI, from China and India who each contributed $500,000 plus administrative fees of $35,000 to $55,000. The investors are seeking to recuperate $26 million in assets allegedly owed by Ziel Feldman and HFZ Capital Group. The investors lost their equity stake when lender Children’s Investment Fund foreclosed and later sold the site to Witkoff Group. Feldman and HFZ have been targeted in a wide range of court cases. Neither party has responded in this case. We are reporting on this case because Feldman and HFZ have a large number of cases and they are significant developers in New York City. In addition, the EB-5 investor program has raised hundreds of million of dollars for New York City development, and this case could impact how investors are treated in other failed investments. Case LINK

Steve Croman allegedly owes $370K in back rent: The Gural family’s GFP Real Estate alleges Steven Croman of Croman Real Estate is the guarantor of a 2017 lease for the second floor of 740 Broadway, and that Croman’s entity, M&E Mott, LLC, made a partial rent payment in April 2022, and did not make rent payments for May 2021 to July 2021 and January and March 2022, resulting in a total due of $370,485. GFP says in the complaint, “Tenant has defaulted on its payment obligations.” Croman’s company remains in the space, according to the complaint. Croman has not responded in court papers, and his position is not known. Often rent disputes such as this are not related to an inability to pay rent, but a separate dispute over the amount to be paid or whether rent is due at all. We are reporting this case because Croman was jailed and fined for aggressive tactics as a landlord, so it is ironic that he is being accused of not paying rent. Case LINK