KPG Funds has lost control of its office redevelopment project at 132 West 14th Street in Greenwich Village after its lender, Thorofare, took over the leasehold. Property records indicate that Thorofare, through an entity connected to its REIT, acquired the 99-year ground lease for $27.7 million. This move concludes KPG’s attempt to convert the seven-story building into a boutique Class A office and retail property.
KPG originally signed the long-term lease with The Salvation Army, the property owner, in 2021 for $22.1 million. In 2022, KPG secured a $34.5 million construction loan from Thorofare for a planned $55 million overhaul of the building. The redevelopment included significant structural changes, such as demolishing the front and rear facades and adding new steel elements. The project was close to completion but had not yet received a new certificate of occupancy, according to PincusCo, which first reported on the acquisition.
Earlier in 2025, JLL marketed the building with an asking price of about $50 million. However, financial difficulties emerged when The Salvation Army filed a nonpayment case against KPG in Manhattan housing court in June, alleging unpaid ground rent totaling $162,500 for two quarters. The court issued a default judgment in August, allowing Thorofare to take control of the leasehold.
The situation reflects broader challenges in New York City’s office market, where higher interest rates and leasing difficulties have affected developers. KPG, led by Gregory Kraut and Rod Kritsberg, had aimed to upgrade older office buildings in neighborhoods like Soho, Tribeca, and Greenwich Village into boutique offices amid limited supply. However, demand for new office space remains inconsistent across the city.
Representatives for both Thorofare and KPG did not respond to requests for comment.
