Less than a year after launching foreclosure proceedings at its Soho office building, Capstone Equities secured 140 Crosby Street all for itself.
An affiliate of the company acquired the 35,000-square-foot property from Madison Capital for $51.4 million, the Commercial Observer reported. The deal breaks down to $1,469 per square foot.
Prime Finance provided $39.6 million in acquisition financing for the transaction, consolidating previous debt against the building. The single lien left includes a gap mortgage for $5.5 million.
A spokesperson for Vornado Realty Trust, which co-owned the property with Madison Capital, declined to comment to the outlet. The other parties to the transaction did not immediately respond to requests for comment.
Joshua Zamir’s Capstone filed a lawsuit in August, alleging Richard Wagman’s Madison Capital and Vornado defaulted on their debt at the building when they failed to pay off the loan at maturity in September 2024. Capstone had acquired the $75 million loan backing the so-called “Gateway to Soho” a month before the foreclosure filing.
Vornado and Madison developed the six-story building in 2019, leasing the retail space to the JBL audio store and Citizens Bank. The property was only 25 percent leased at the end of 2024, according to a report from Vornado, which owned half the property.
The partners put the building up for sale in the summer of 2024, around the time the maturity was coming due, seeking a price tag of about $100 million; no deal ever materialized.
The borrowers took out the $75 million loan in 2019 with Société Générale and signed a bad boy guarantee, making them liable for losses on the loan if they commit prohibited acts like fraud or misappropriation of funds. Capstone, which bought the loan from the French bank, did not allege any violations of the “bad boy” carveouts in its lawsuit, though it said it reserved the right to enforce the guarantee.
The property is located at the corner of Broadway and Houston Street. It is next to a highly visible building that welcomed shoppers with ads painted on its broad, exposed wall for brands like Hollister and DKNY.
Capstone has been actively buying distressed properties and non-performing loans.
In 2023, the firm took over the Whale Building in Sunset Park after acquiring the debt and foreclosing on Elie Schwartz’s Nightingale Properties. Zamir stuck to that playbook last summer when it took over Savana’s 141 Willoughby office tower in Downtown Brooklyn after buying the building’s debt and foreclosing.
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