For a nice little 12-story building in the heart of the “world’s greatest shopping street,” 609 Fifth Ave. sure packs a lot of intrigue.
We don’t know everything that’s going on behind its limestone-and-glass facade. The Hoodline real estate site accurately described the 609 Fifth Ave.’s situation as “a dense web of loans, lawsuits and repair claims.”
Owners, creditors and debtors involved at the property are engaged in a “restructuring,” while the Puma flagship store at the building’s base, although not a party to those negotiations, was knocked out by a flood it blamed on the owners of the building’s office floors.
We’re told, and it’s been reported elsewhere, that a “borrower entity tied to” the property filed for Chapter 11 bankruptcy in order to block a foreclosure sale that was scheduled for March 19.
The office condominium owners, RJ Capital Holdings and Top Rock Holdings – or their “entity” – went to court last week.
At issue is debt on the property that might total $135 million, of which only a $50 million mezzanine loan appears to be in default.
The reason for the Chapter 11 filing to block the sale was to give time for “lender and borrower and lienholders and equity holders to have a collaborative, thought-provoking discussion to enhance asset value so all are paid in full with interest,” said attorney Leo Jacobs, who represents the RJ Capital-Top Rock “entity.”
We’d imagine that having 139,000 square feet of empty office space, for which the new owners paid $100 million four years ago, is no picnic. Top Rock had planned to expand the office floors for residential conversion, a step that would double the building’s size — but heat from creditors stalled the plan.
Jacobs told us that since the new owners bought the office floors from SL Green in 2022, “What’s changed are interest rates and the geopolitical climate” including a new mayor, Zohran Mamdani.
He explained, “The creditor is a mezzanine lender. The asset” — i.e., the vacant office floors — “is owned by a holding company which is pended by another which is owned by the debtor, who is the borrower.”
All clear?
Adding to confusion, The Real Deal reported that “the identity of the mezzanine lender and the amount of the mezzanine debt are not known” — before naming the unsecured mezz lender as GW Assets FZE.
Meanwhile, the poor Puma store, a two-level showplace at one of the avenue’s most heavily trafficked corners, had to close indefinitely due to a flood from broken pipes in February.
Puma filed suit on March 2 alleging the office-portion owner failed to pay steam and water charges that left the building “without heat and led to multiple pipe bursts,” Hoodline reported.
A spokesperson for law firm Greenspoon Marder, which represents the creditors, said, “We do not provide comments on any matters that are the subject of pending or ongoing litigation including bankruptcy proceedings.”
A Puma rep couldn’t be reached.
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