Aby Rosen’s hopes of hanging onto legendary Lever House despite a mortgage foreclosure may have been dashed as a venture of Brookfield and Tod Waterman signed a ground lease with the Korein family landowners to operate the iconic property at 390 Park Ave.
Brookfield-Waterman’s ability to run the building, however, is subject to other leases and encumbrances, the venture said in its press release on Friday.
Those other leases include the 99-year one held by Rosen and his RFR Holdings to run the landmarked Lever House through 2098. The company pays a current ground rent of around $6.2 million to the Koreins.
But a rent reset in 2023, expected to be over $20 million based on the value of the land in 2019, has been a looming obstacle to a new mortgage as income won’t even cover the new ground rent — let alone payments to a new lender.
“It’s only 235,000 square feet and if they can get $90 a foot [from office tenants], which is on the high side, that’s $21 million a year in rental income and that’s completely wiped out by the ground lease,” explained Manus Clancy of Trepp, which keeps tabs on collateralized mortgages.
Sources told the Post the Korein family felt Rosen cheated them over a previous deal at 608 Fifth Ave. and would not change the current Lever House lease.
It is likely however, that the Koreins gave Brookfield and Waterman a friendlier lower rent, and that the venture has cut a deal with the mortgage servicer, CWCapital, to buy the remaining $85.5 million on the mortgage for a discounted amount, leaving them to complete the foreclosure that was started in 2016.
“The way it could work out for Rosen is if he has his own white knight who comes in or goes back to CWCapital, and makes a better offer than Brookfield,” said Clancy.
The parties either did not respond or declined to comment.