Madison Realty Capital is moving to foreclose on Raphael Toledano’s six-story Chelsea rental building at 125 West 16th Street, believed to be the single-most valuable property in his holdings.
Toledano’s [TRDataCustom] Brookhill Properties acquired the 39-unit, 39,000-square-foot property for $41.5 million in 2015. At the time of the purchase, the firm secured $34 million in financing from Madison, including $29.8 million in immediate funds to buy the building. The remainder, to be provided at a later date, was allocated for proposed renovations.
Madison, in its capacity as the lender, filed the summons filed Monday in New York State Supreme Court, to initiate foreclosure proceedings over the building, which has $29.8 million loan.
A source close to Toledano said he and his partners defaulted on the building as a result of a partnership dispute. Toledano’s partners wanted to sell it, but Toledano wanted to continue making renovations, sources said.
Toledano, whose holdings are largely aging walk-ups in the East Village, named the building “the Devorah” after his wife. He bought it with the intention of adding two floors and converting the two office units into “townhouse-style” homes. Those plans were later put on hold.
Brookhill and Madison, led by Josh Zegen and Brian Shatz, declined to comment.
Critics have said Toledano is overleveraged. Madison provided a $124 million loan to finance the purchase of the larger of two Tabak family-owned portfolios in the East Village last year.
Meanwhile, Toledano is looking to sell at least 13 of his buildings. He is in contract to sell a six-story building at 97 Second Avenue to investor Dominic Gan for $15 million, having paid $5 million for it last year, according to sources and records.