The Ohebshalom family, known for its real estate holdings in New York, is facing foreclosure proceedings on its Midtown headquarters at 226 East 54th Street. LBC2 Trust, an entity linked to Stillwater Asset Management of Minnesota, has filed a lawsuit in Manhattan Supreme Court alleging that Fred, Benjamin, and Jonathan Ohebshalom defaulted on a $12.6 million mortgage after failing to pay off the loan when it matured in October. The family reportedly still owes about $10.1 million.
Stillwater Asset Management is seeking court approval to move forward with a public auction of the property if the outstanding debt is not repaid.
The building in question is nine stories tall and spans 31,000 square feet between Second and Third avenues. It serves as the base for Sky Management, which oversees many of the Ohebshaloms’ apartment properties. Other tenants include Trooper Fitness and FiftyFour NYC, an event venue specializing in bar mitzvahs. According to CoStar data referenced by Crain’s New York Business, the property is currently 96 percent leased with asking rents near $40 per square foot.
The Ohebshalom family has previously faced similar challenges with lenders and city regulators. In 2022, Stillwater initiated another foreclosure action against this same property before reaching an agreement that extended the loan payoff date by two years. Additionally, their multifamily portfolio has accumulated several city violations related to elevator outages and other maintenance issues.
When contacted by Crain’s for comment regarding the current foreclosure suit, Jonathan Ohebshalom at Sky Management declined to respond.
Ownership records indicate that the Midtown property has changed hands within the family over time. The Ohebshaloms purchased it in 2007 through Majestic Realty Associates for $7.7 million and later sold a half interest to Gemini Partners Realty for $7.3 million in 2016; Fred Ohebshalom was listed as manager of both entities involved.
Sterling National Bank originated the original mortgage on the building in 2018; following Webster Bank’s merger with Sterling in 2022, Stillwater took over as lender.
