Joshua Zamir’s Capstone Equities has initiated foreclosure proceedings on the office and retail property at 140 Crosby Street, known as the “Gateway to SoHo,” after acquiring a $75 million loan tied to the building last month. The move follows claims that Madison Capital, led by Richard Wagman, and Vornado Realty L.P. defaulted on their debt when they failed to pay off the loan at its maturity in September 2024.
The lawsuit filed by Capstone notes that both Wagman and Vornado had signed a guarantee on the debt in 2019. Capstone stated it “reserves the right to seek a deficiency judgment” against the guarantors once foreclosure is complete.
Attempts to reach Madison Capital for comment were unsuccessful, while a spokesperson for Vornado declined to comment.
The six-story, 36,000-square-foot building stands at Broadway and Houston Street. Developed by Vornado and Madison in 2019, it leased space to tenants such as JBL audio store and Citizens Bank but was only about 25 percent occupied at the end of 2024 according to Vornado’s annual report. The property had been listed for sale last summer with an asking price near $100 million, though no sale occurred.
The original $75 million loan was issued in 2019 by Société Générale. Borrowers signed a so-called bad boy guarantee, which holds them liable if they commit acts like fraud or misappropriation of funds. Capstone’s lawsuit did not allege any such violations but reserved rights under the guarantee.
Capstone has recently increased its activity in acquiring distressed properties and non-performing loans. In 2023, it took control of Sunset Park’s Whale Building after buying its debt and foreclosing on Nightingale Properties. Earlier this month, Capstone also took over Savana’s 141 Willoughby office tower in Downtown Brooklyn using a similar strategy.
