A Midtown shopping hub in foreclosure proceedings could be sold Friday, according to a court document.
The retail space at 1011 Third Ave., which was home to the flagship Dylan’s Candy Bar for 20 years, has been on the market since shortly after owner Olshan Properties defaulted on its $35 million mortgage in March 2024. Bids to acquire the 36,000 square-foot shopping center at the corner East 60th Street have been rejected so far by the lender, court records show. But in a letter filed in court on May 20, attorneys for both sides said the property could be sold at a price high enough to settle the building’s debt by June 6.
“The parties are hopeful that there will be a closing with the new proposed purchaser by that date, which could resolve the entirety of the litigation,” reads the letter co-written by an attorney for Olshan, Matthew Parrott of Fried Frank Harris Shriver & Jacobson, and an attorney for lender Wilmington Trust, Ashley Newman of Hinshaw & Culbertson.
It isn’t clear who the new proposed buyer is. Olshan declined to comment and Newman didn’t return a call or email.
The shopping center was developed in 1986 by Morton Olshan, one of New York’s largest developers, next to a 43-story residential tower he built called the Savoy. Dylan’s Candy Bar, a popular destination for birthday parties founded by Ralph Lauren’s daughter, closed in 2021 and last month home-goods store Blinds to Go opened in the corner space. Three storefronts facing Third Avenue remain empty and the site was just 54% leased as of last September, Moody’s said in a report this week.
Lenders filed a lawsuit to foreclose on 1011 Third last November, four months before Morton Olshan died at age 99. His firm’s lawyers argued a sale of the building should be postponed until proceeds from his estate could be tallied up and distributed. The lender countered that process could take years.
“My client should not be left in limbo for that extended period of time,” Newman argued at an April 29 hearing.
Judge Anar Rathod Patel agreed and at the hearing ordered the case to continue.
A “best and final” bid at an auction last December valued 1011 Third at 89 cents on the dollar, according to a court document, or $31 million.
“The sales process has been ongoing for several months and the bidders won’t hang around the hoop for much longer,” Olshan’s head of investments and capital markets, Michael Odell, wrote in a Dec. 24 email. “We don’t envision a better outcome is possible.”
An employee at loan servicer Rialto Capital Advisors, Jordan Friedman, rejected the offer.
“We are not interested in taking a discount on this loan at this time,” he wrote.
A sale price of $31 million would value the Third Avenue shopping center at $860 per square foot. That’s less than half the price paid in the first quarter for retail space one block south at 200 E. 59th St., according to Cushman & Wakefield.
The Olshan-owned property may be a tougher sell because it faces East 60th Street, which gets lots of traffic from vehicles exiting the Queensboro Bridge. This morning cars and trucks were lined up bumper-to-bumper from Second Avenue until at least Lexington Avenue. That’s not unusual, according to the proprietor of Stef’s Coffee Shack, a pushcart on the southwest corner of East 60th.
“It’s always pretty slow along this street,” said Stef, who declined to give her last name. “I don’t think congestion pricing made a difference here.”
