Jefferies Loancore backs troubled Manhattan condo conversion

Jefferies Loancore has provided a $55 million loan to the stalking horse bidder who purchased a troubled condominium conversion in Manhattan’s Financial District, Real Estate Capital has learned based on city property records filed today.

Jefferies Loancore has provided a $55 million loan to the stalking horse bidder who purchased a troubled condominium conversion in Manhattan’s Financial District, Real Estate Capital has learned based on city property records filed today.

The documents show that Jefferies Loancore made the loan to Capital Invest Alliance, which purchased 45 John Street  for $73 million after the property auction failed to yield higher bids.

The 14-story, 102,000 sq ft property was reportedly put up for auction on behalf of Orin Management as part of a bankruptcy settlement.

1291637The condo conversion was to be completed under the Brooklyn investor and former owner of the property, Chaim Miller, but plans fell through.

The property was then sold to Orin Management in the early part of last year, after which followed a series of lawsuits relating to Miller’s alleged mismanagement of the sale, including the embezzlement of funds and other unlawful dealings, according to reports in The Real Deal.

The previous debt was a loan from Madison Realty Capital, which was expected to receive at least $53 million following the auction sale. (Incidentally, Madison Realty Capital currently finds itself facing a $150 million lawsuit filed by SMK Property Management regarding 15 counts of alleged fraud tied to mortgage notes).

Capital Invest Alliance is headed by real estate investor Alexander Levin, who was part of the investor group that purchased the Beekman Tower, a 76-story art deco skyscraper at 8 Spruce Street in Manhattan, for $138.8 million in July.

Among recent deals, in November Jefferies Loancore provided a $36 million loan to refinance the 222-room Whitehall Hotel in Chicago. That loan is part of a CMBS offering led by Deutsche Bank Securities.                 

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