Larry Gluck and Stellar LLC who had hoped to auction off the Riverton Harlem housing project on Friday, got some more bad news today, when Wells Fargo announced it is seeking foreclosure on the 1,230 unit apartment complex. The auction has now been cancelled until further notice according to Steve Solomon, a spokesman for Gluck. Wells, which has problems of its own with its stock hitting an all time low of $12.06 today, is custodian for a bunch of illiterate CMBS investors who bought into the Riverton property several years ago. Now they are stuck with major losses on the property behing the loan, originally evaluated at $340 million. The bank has asked New York State Supreme Court to order the properties to pay $225 million in principal plus interest, fees and late charges. Good luck collecting, seeing as the property had been scheduled to be auctioned off on February 20 for about $196 million. According to Andy Day a CMBS guru at MS, the Riverton complex may appraise for "substantially less" than $196 million. The case is actively followed as it will serve as a benchmark for a true market test of the atrocious state of New York commercial real estate.
The case is Wells Fargo Bank v. RP Stellar Riverton and Gluck, 09101491, Supreme Court of New York (Manhattan).
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