Joshua Zamir’s Capstone Equities has initiated foreclosure proceedings against Madison Capital and Vornado Realty L.P. over the property known as “Gateway to SoHo” at 140 Crosby Street. The action follows Capstone’s purchase of a $75 million loan tied to the building, which matured in September 2024 without repayment.
Capstone filed a lawsuit on Monday, alleging that Madison Capital, led by Richard Wagman, and Vornado defaulted by failing to pay off the debt when it came due. Both Wagman and Vornado had signed a guarantee on the loan in 2019.
Capstone stated it “reserves the right to seek a deficiency judgment” against the guarantors once foreclosure is complete.
Efforts to reach Madison Capital for comment were unsuccessful, while a spokesperson for Vornado declined to comment.
The six-story, 36,000-square-foot property at Broadway and Houston Street was developed by Vornado and Madison in 2019 after sitting vacant for years. Retail tenants include JBL audio store and Citizens Bank. As of late 2024, only about a quarter of the space was leased according to Vornado’s most recent annual report; Vornado owns half of the building.
Last summer, as the loan maturity approached, the owners put the property up for sale with an asking price near $100 million but did not secure a buyer.
The original $75 million loan was issued by Société Générale in 2019. Borrowers signed a so-called bad boy guarantee making them liable if they committed certain prohibited acts such as fraud or misappropriation of funds. Capstone has not alleged any violations under these carve outs but indicated it may enforce its rights under the guarantee.
Zamir’s firm has been active in acquiring distressed assets and non-performing loans recently. In 2023, Capstone took control of Sunset Park’s Whale Building after foreclosing on Elie Schwartz’s Nightingale Properties through debt acquisition. Earlier this month, Zamir used a similar strategy to take over Savana’s office tower at 141 Willoughby in Downtown Brooklyn after buying its debt and foreclosing.
