NYC High Line-Area Building Floats $53 Million Bankruptcy Sale
TL;DR
A commercial loft building in West Chelsea near NYC's High Line has filed for bankruptcy to stop foreclosure by JPMorgan Chase, aiming to sell the property for $53 million to repay debts. The building, which lost tenants during the pandemic, has rebounded and received a stalking horse offer, with the sale potentially covering the $40 million owed to the bank.
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A commercial loft housing art galleries and photographers’ studios in West Chelsea has filed for bankruptcy to halt foreclosure by its lender, JPMorgan Chase & Co., as it seeks to close a $53 million deal to sell the property.
Mariner’s Gate LLC, the owner of a six-story building at 548 West 28th Street near Manhattan’s High Line park, sought court protection to pause a planned foreclosure sale that was scheduled for Wednesday, according to court papers. The sale was planned after the building’s owner said it was unable to restructure a senior mortgage held by the bank.
JPMorgan is owed more than $40 million according to court papers. Representatives for the lender declined to comment on the filing.
It’s one in a string of buildings falling behind on their debts after the Covid-19 pandemic upended commercial real estate in New York City and other metro areas. The filing comes weeks after the owner of Fordham Landing, a major housing development in the Bronx, also filed bankruptcy.
Converted from its industrial roots into a commercial space, the property had near 100% occupancy rates before the pandemic, but lost about a third of its tenants, resulting in reduced rent and increased operating costs, according to Mariner’s Gate owner James Y.A. Pastreich. The building has rebounded, however, and if the potential sale is consummated it would fully repay JPMorgan and its other main creditor, he said in a bankruptcy court filing.
The building has space for roughly 50 tenants as well as retail space on the ground floor and is accessible by Hudson Yards train station that opened a decade ago, according to court papers. In addition to galleries and photographers, current tenants include fashion businesses and other commercial tenants.
The owner retained a broker earlier this year to market the more than 102,000 square foot property, Pastreich said. The company has received a term sheet “from a prospective stalking horse buyer” for the building and an adjoining property, he said. A stalking horse deal, if finalized, would set the floor price for the property and be subject to better offers at a bankruptcy auction.
“The debtor views the term sheet as an extremely positive development, which the debtor hopes will materialize into a firm stalking horse contract to be presented to the court,” Pastreich said.
JPMorgan acquired the mortgage when it acquired First Republic in 2023, according to the papers.
The case is Mariner’s Gate LLC, number 25-12819, in the US Bankruptcy Court for the Southern District of Neew York.