The Sapir Organization is officially on the clock to refinance a pair of Madison Avenue office buildings.
Sapir failed to pay off a $231 million CMBS loan for its high-rises at 260 and 261 Madison Avenue before its mid-June maturity date, according to Trepp, a data service that tracks securitized mortgages. Sapir entered into a forbearance agreement with the loan’s servicer, allowing an additional 60 days to pay off the debt.
The firm, led by Alex Sapir, put the two Midtown properties on the market earlier this year, hoping to get around $600 million for them as it shifts its investment strategy to Florida. Now, Sapir will have about a month to find a buyer or a lender that’s willing to refinance its CMBS loan.
Sitting opposite one another on Madison Avenue between East 38th and 39th streets, the two buildings were 81 percent leased as of March, down from 92 percent in December 2020, according to Moody’s Investors Service. Notable tenants include the law firm McLaughlin & Stern and the Sapir Organization’s own headquarters.
Rising interest rates have made borrowing more expensive, but landlords have still been able to score refinancings on maturing loans. Sapir may have held off on refinancing the properties in recent months as it searched for a buyer.
The buildings also have a role in a tangle of lawsuits between Alex Sapir and his ex-brother-in-law and former business partner Rotem Rosen.
Rosen claims Sapir was supposed to buy out his interests in a partnership between the investors for $75 million. Of that, $15 million was to be paid upfront while the rest would be paid over 15 years. Sapir’s debt to Rosen was guaranteed by 260 and 261 Madison Avenue, and Rosen alleges that Sapir breached the agreement by refinancing a line of credit on the property, triggering a clause that made the $60 million debt payable immediately.
But that dispute is not the only lawsuit in which 260 and 261 Madison are involved. Sapir is suing former tenant WeWork for ditching its lease at the property last year, alleging that WeWork owes $17 million in damages. WeWork, meanwhile, argued that the Sapir Organization was struggling financially and “resorted to questionable practices in order to extort WeWork” and its founder Adam Neumann.
Sapir bought the Madison Avenue properties in 1997. The company was founded by Alex’s father, the late Tamir Sapir, a Georgian-born billionaire who partnered with Trump on the former president’s lower Manhattan hotel project, Trump Soho.
The firm more recently developed Arte, a 16-unit luxury condo building in Surfside, Florida, that is nearly sold out.
Alex Sapir did not respond to requests for comment.