School’s back in session. Real estate is, too.
JEMB Realty recently ended a legal nightmare with ASA College at a building in Herald Center. The saga began in 2020 when ASA missed rent payments, leading JEMB to sue the school and its owner, Alex Shchegol.
But the lawsuit was one of many controversies dogging Shchegol and the for-profit college industry. Shchegol made life hard for the college’s old landlord, embarking on a series of unusual legal maneuvers, leading to accusations from JEMB’s lawyers that said his legal strategy amounted to judgment evasion.
With the litigation all settled, JEMB may finally collect from ASA; a New York state court awarded two judgments over $18 million against Shchegol and ASA in 2022.
ASA’s space at 1293 Broadway has since been taken by Yeshiva University.
That legal saga wasn’t the education system’s only grip on real estate this week.
The Upper West Side property that held the shuttered Manhattan Country School, a progressive private institution, is up for sale. Manhattan Country School purchased the building from The New School, which housed its music college at the site.
The building at 150 West 85th Street was appraised at $39 million in 2021, but it’s unclear what Bob Knakal will be able to arrange in an acquisition.
The school’s expansion plans, funded by draining its endowment and borrowing $20 million, were hindered by the pandemic and may have ultimately led to its collapse and bankruptcy.
Queens-based Flushing Bank held the debt. Last October, it filed for foreclosure on the building. A bankruptcy filing for the school came months later.
Glow up
Elsewhere, Sephora leased a 7,800-square-foot retail space at 1 St. Mark’s Place, a boutique office project in the East Village developed by the late Brandon Miller’s company, Real Estate Equities Corporation.
The project has seen its fair share of challenges, including a foreclosure attempt in 2021 before construction began and REEC falling behind on loan payments in the middle of last year.
Despite past difficulties and a shift in REEC’s focus to office development before the pandemic, the completion of the building and this lease indicate a positive step forward for the project.
Lagging
New development contracts in NYC fell 9 percent in August, but dollar volume jumped by 13 percent to $597 million, largely on the back of an $87.5 million penthouse deal at 140 Jane Street.
A major factor contributing to the seemingly slow month was 80 Clarkson Street, a 112-unit development, which has yet to report any contracts despite reported strong sales activity.
Other factors weighing on the market include a lack of new inventory, buyers anticipating lower mortgage rates and uncertainty surrounding the upcoming mayoral race.
Read more
JEMB ends legal nightmare against troubled ASA College
Manhattan Country School to sell UWS building
Sephora inks lease at Brandon Miller’s East Village project