The Brooklyn Tower, a 93-story skyscraper located at 9 DeKalb Avenue, is facing financial difficulties as its developer, Michael Stern, has defaulted on a substantial $240 million mezzanine loan.
Silverstein Capital Partners, the lender, has initiated foreclosure proceedings, with a UCC foreclosure auction set for June 10, according to JLL, the real estate company marketing the property.
A Silverstein spokesperson confirmed to The Post that the tower’s “junior mezzanine, senior mezzanine and mortgage loans are in maturity default.” They added, “The junior mezzanine lender is enforcing its junior mezzanine loan remedies through a Uniform Commercial Code (UCC) sale process.”
The tallest tower in Brooklyn is facing foreclosure.
The Brooklyn tower: 93-story, 1,066-foot tower in Downtown Brooklyn.
The asset includes 398 rentals and 143 condos.
In 2019, the sponsor took out a $664mm debt package to construct the building.
Larry Silverstein's debt… pic.twitter.com/ncZww1IxsK
— Shashankh Aryal (@aryal1994) March 30, 2024
The future of the recently opened tower remains uncertain, despite its recent record-breaking sale of a 440-square-foot studio for $905,000, the most expensive studio in Brooklyn’s history.
The apartment, unit 72A, boasts floor-to-ceiling windows, a Miele washer-dryer, and European white oak flooring, all at an impressive 720 feet above the street.
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Stern had previously attempted to sell the building’s rental portion, consisting of 398 apartments and amenities such as a pool, retail space, and a LifeTime Fitness center, for $500 million in early 2023.
However, the listing, which did not include the tower’s 143 residential condominiums, failed to attract a buyer.
The Brooklyn Tower’s financial troubles can be seen as another example of the challenges faced by the real estate market under the current economic policies of the Biden administration.
Beyond its financial woes, the imposing metallic supertall has also garnered attention for its ominous appearance.
The Tower Of Sauron Can't Pay Its Debt: Brooklyn's Tallest Building Is In Foreclosure https://t.co/4HXWudgphJ
— zerohedge (@zerohedge) March 29, 2024
As one video producer living across the street remarked to The Post, the building resembles “the headquarters of an evil corporation in a superhero movie.”
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As the fate of Brooklyn’s tallest building hangs in the balance, it serves as a stark reminder of the complex challenges facing the real estate industry in the current economic climate, where even record-breaking sales may not be enough to keep a skyscraper afloat.
