A half-full medical building around the corner from Lenox Hill Hospital is at risk of being auctioned off to the highest bidder after some lenders have accused its owners of being more than a year behind on mortgage bills.
A group of investors that includes Blackstone has sued the development firms Feil Organization and Rosen Equities for allegedly defaulting on a $9 million loan tied to 162 E. 78th St., a 9,000-square-foot townhouse-style office site on the Upper East Side.
According to the suit, filed Wednesday in Manhattan state Supreme Court, Feil and Rosen have not made a payment on the loan since February 2024 and now are at risk of losing the property to a foreclosure auction ordered by the court.
Penn District-based Feil, whose CEO is Jeffrey Feil, and Upper East Side-headquartered Rosen, headed by Jonathan Rosen, have not yet filed a response to the suit, though it’s not required for several weeks. And emails sent to the firms were not returned by press time.
But the building between Lexington and Third avenues, which is home to offices for neurologists, gynecologists and physical therapists about two blocks from the hospital, seems to be struggling with vacancies, with just 46% of the midblock building currently leased, according to data service provider CoStar. Rents at the red-brick, prewar elevator building average $80 per square foot annually, CoStar says.
Based on the city register, the partnership bought the 7-story site in 2016 for $17.4 million in a deal financed in part with the $9 million mortgage, which was issued by Signature Bank. Signature collapsed in early 2023, and later that year the investor group, which also includes Rialto Capital Advisors and Canadian pension firm CPP Investments, snapped up a 20% stake in Signature’s former portfolio for $1.2 billion.
In the years since, the group has aggressively pursued borrowers alleged to be in default, though the effort has sometimes led to a pushback over its tactics, with one prominent developer, the Cayre family’s Midtown Equities, countersuing the entity and describing its strong-arm approach as “sinister.”
No. 162 was for decades the home of the Research Institute for the Study of Man, a nonprofit led by anthropologist Vera Rubin that in the early 1970s conducted a well-known study of marijuana-smoking Jamaicans to determine whether or not pot posed long-term health risks.
Her conclusion, which came as the drug was moving from the counterculture to the mainstream, was that its adverse effects were overstated.
As hospitals brace for expected Medicaid cuts by Congress, some are already scaling back. New York-Presbyterian announced Wednesday it would lay off 1,000 workers in the face of “macroeconomic realities,” for instance.
Michael Kwiatkowski, the lawyer at Long Island-based firm Cullen and Dykman who filed the paperwork on behalf of the lenders, did not respond to a request for comment.
