Starwood Iniates Pre-Foreclosure on Two Thor Properties in Midtown, Manhattan

Thor Equities has found itself relinquishing its control over two office and retail properties in Manhattan.

The commercial buildings, at 597 Fifth Ave. and 3 East 48th St., have fallen under the jurisdiction of a court-appointed receiver, as mandated by a judicial decree. This directive materialized in the wake of pre-foreclosure actions initiated against Thor by LNR Partners, a subsidiary under the aegis of Barry Sternlicht's Starwood Property Trust, in tandem with Wilmington Trust, back in February.

The stewardship of both properties has been entrusted to Hope Plasha, a partner hailing from Patterson Belknap, as officially delineated in a court-issued order this past June. Remarkably, neither Plasha nor Thor have responded to any requests for comments. 

Most of the issues between these Thor and LNR Partners arose after Thor failed to make the required monthly payments toward a $105 million loan they received back in 2014. UBS had provided the money and, eventually, the obligation was bundled into a CMBS trust, with Wilmington assuming the role of trustee later that year. LNR entered the negotiations as a special servicer in October 202, and both Wilmington and LNR kicked off the pre-foreclosure in February 2023. 

According to a Securities and Exchange Commission filing dated December 2022, the Lender was expected to “continue to dual track foreclosure/receivership proceedings while discussing potential alternatives with Borrower.”

The receiver filed a bond valued at $5 million and is presently involved in the process of taking the reins of these assets, as per Morningstar Credit. As of March, statistical reports from the same source indicate that these two properties maintained a 49% occupancy rate.

Both these properties stand next to each other, with 597 Fifth Ave. soaring to a notable 12 stories, while its neighbor, 3 East 48th, features six stories. These structures combine retail and office spaces. Thor's initial acquisition of these assets dates back to 2011 when they exchanged hands for $108.5 million.