Owners say they are working things out with lender New York Life
By: Keith Larsen
Jeff Sutton and 717 Fifth Avenue (Google Maps)
New York Life Insurance Company filed a foreclosure action on a marquee Fifth Avenue retail property, alleging that a company tied to Jeff Sutton’s Wharton Properties and SL Green Realty defaulted on a $300 million loan.
The lender alleges 717 GFC LLC, which lists the same address as Wharton Properties, now owes $314 million, including interest and late charges. The loan is secured by the retail and fourth-floor offices at 717 Fifth Avenue, where Dolce & Gabbana and Armani are tenants.
The lawsuit was filed in Manhattan Wednesday and does not have an index number, which means the county clerk has yet to review it.
Sutton and partners, including Stanley Chera, bought the retail space in the 26-story office building in 2004. Two years later, Sutton bought out his partners and SL Green took a stake in the property. In 2012, Sutton acquired most of SL Green’s stake, leaving Marc Holliday’s firm with 10.92 percent, according to SL Green’s filings with the Securities and Exchange Commission.
In 2012, New York Life Insurance and TIAA provided the $300 million loan in two $150 million pieces. The property also took a $355 million mezzanine loan, according to an SL Green filing with the SEC.
New York Life bought TIAA’s half of the loan last fall, according to the lawsuit. The insurance company alleges the property owner failed to pay off the loan when it came due July 11. Two weeks later, New York Life notified 717 GFC that it was in default.
The property owners said Wednesday that the foreclosure suit was filed even though the two sides are working things out.
“Today’s filing was a technicality — the senior and mezzanine lenders on the property are currently working through terms and we are hopeful to reach a comprehensive deal with the lender group on an extension in short order,” said a spokesperson for 717 GFC.
Anbang bought the office portion of the tower — known as the Glass Corning Building — from Blackstone in 2015.
By 2019, the Chinese insurer reportedly was looking to sell its portion of the building, but still owns the property. The building, located at the corner of Fifth Avenue and 56th Street, is across from Trump Tower in an area that has commanded some of the highest retail rents in the country.
Sutton is one of the largest retail landlords in the city. His Wharton Properties also owns 724 Fifth Avenue, which includes Prada’s flagship store. That building scored a $235 million refinancing last year.
New York Life Insurance’s attorney did not return a request for comment.