Madison has owned the $48 million loan package backed by REEC's East Village property since 2019. The real-estate private equity firm acquired the debt from South Korean financial services firm Hana Financial group, which provided REEC $79.1 million of debt and sold the $48 million portion to Madison Realty Capital.
Madison filed a complaint with the state Supreme Court in Manhattan, alleging that REEC defaulted on the $48 million mortgage, which combines an acquisition loan and construction loans.
An REEC spokesperson said that they "are working on a recapitalization plan and are optimistic that this will be resolved in the near future."
This is the latest drama for the high-profile corner. As previously reported, a 10-story office building has been in the works here at 3 St. Mark's Place at Third Avenue.
REEC picked up the 99-year leasehold for the corner properties for nearly $150 million in November 2017. The Gabay family had owned the buildings for generations.