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ABF Properties faces foreclosure at another WeWork site in Midtown

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Shock waves from WeWork’s collapse continue to spread, even as the coworking company regroups in bankruptcy court.

Lender Wells Fargo has sued ABF Properties for defaulting on a $70 million mortgage secured by 25 W. 45th St., a 16-story office building where WeWork leased two floors but exited in 2021, according to a new court filing.

The loan came due in January but was not paid off, according to the suit, which was filed Tuesday in Manhattan Supreme Court. Wells Fargo is now asking a judge to begin the foreclosure process at the Midtown property.

ABF has not yet filed a legal answer to the complaint, and a phone message left for ABF Managing Partner Berndt Perl was not returned by press time.

At first blush No. 25, a limestone structure developed by Jacqueline Kennedy Onassis’ grandfather James T. Lee, appears to be in decent shape lease-wise, especially in regards to the sluggish office market. The Class B building, whose tenants include jewelry firm Worthy, bespoke tailor Tom James Co. and an ad agency trade group, has an 88% occupancy rate, according to CoStar.

But the rate apparently stood at a much lower and cash-flow-challenging 73% in the wake of WeWork’s exit from the midblock address in 2021.

The court action is the latest WeWork-fueled blow against ABF, a 30-year-old, Manhattan-based firm that appears to have gone all in on leases for the once-ubiquitous coworking firm.

In January Wells Fargo sued ABF over a defaulted mortgage at 24 W. 57th St., an office building where WeWork once leased five of the 10 floors. In February a judge put a receiver in charge of the Billionaires Row property, where ABF apparently still owes $50 million of a $60 million note.

WeWork, which moved to rip up dozen of leases across the city after its November bankruptcy protection filing, though many of its locations had already been dark for years, also created vacancies at ABF-controlled 183 Madison Ave. near NoMad and 1156 Sixth Ave. in Midtown. ABF also owns 28 W. 44th St., which is its Midtown headquarters.

In 2000 ABF and partners bought No. 25 for about $33 million, according to the city register, and in 2013 borrowed $70 million against it from the German American Capital Corp. Wells Fargo appears to have acquired the debt the following year.

According to the lawsuit, ABF still owes $64.3 million of its principal plus about $4 million in interest in fees.

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C. J. Hughes , 2024-05-21 22:31:56

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