Two prolific local developers are facing foreclosure at one of their Lower Manhattan office buildings, records show.
NoMad-based Stellar Management and City Urban Realty have allegedly defaulted on a $21 million loan tied to the firms’ joint property at 243 Canal St., on the border of Little Italy and Chinatown, according to a lawsuit filed in state Supreme Court in Manhattan Tuesday. It was first reported on by PincusCo.
The 6-story building, between Centre and Lafayette streets, is occupied by three tenants, including a jewelry retailer, a chocolate manufacturer and the bank Santander, according to information from CoStar, which estimates rents in the building are between $49 and $59 per square foot.
Miami-based special servicer Rialto Capital Advisors filed the action under the entity Sig Cre 2023 Venture against the two real estate firms through their limited liability company Canal Street Ventures, records show. The lawsuit also specifically names Michael Alvandi, principal at City Urban Realty, and the estate of Laurence Gluck, Stellar Management’s founder and longtime leader who died last year after a battle with ALS.
The original 2019 loan from Signature Bank was assigned to investment giant Blackstone in 2023, through Sig Cre 2023, after the former financial institution’s collapse earlier that year, according to court documents. Robert Sitman, managing director and global head of asset management at Blackstone, signed the documents, records show.
Then on Aug. 1, Rialto Capital Advisors sent the borrowers a notice of default, weeks after they missed the loan’s maturity date, records show. They maintain an unpaid balance of $21 million plus interest and fees, according to court records.
Alina Levi, an attorney at Midtown-based law firm Polsinelli, which is representing the plaintiff, did not respond to a request to comment by press time.
Neither Stellar Management nor City Urban Realty responded to a request for comment by press time, and it’s unclear if they have legal representation. Court records did not yet indicate an attorney.
Stellar’s portfolio spans more than 13,000 apartments in more than 100 buildings, along with more than 1 million square feet of retail space, more than 2 million square feet of office space and more than 1 million square feet of developments in its pipeline.
