ACORE Capital Takes Back Hell’s Kitchen Lab Site in $60 Million Deed-in-Lieu Deal

ACORE Capital Takes Back Hell’s Kitchen Lab Site in $60 Million Deed-in-Lieu Deal

Lender ACORE Capital has reclaimed control of a pair of adjacent office properties in Manhattan’s Hell’s Kitchen neighborhood after a planned life sciences conversion stalled, according to city records filed Wednesday.

ACORE received 707 11th Avenue and 615 West 50th Street through a deed in lieu of foreclosure valued at $60 million. Jason Mann, a managing director at the lender, signed the filing on behalf of the new ownership entity, Wexford Investment Trust. John Lawrence, senior managing director at developer Beacon Capital Partners, signed for the prior ownership.

The properties had been owned by The Georgetown Company and Beacon Capital Partners, which purchased the next-door buildings near the corner of 11th Avenue and West 50th Street in 2021 for $95 million from SL Green Realty. The larger of the two, 707 11th Avenue, formerly served as the headquarters of fashion brand Kenneth Cole.

In early 2023, the ownership filed plans to replace the office buildings with a seven-story life sciences facility featuring laboratory, research, and office space. The project would have been Manhattan’s first ground-up, purpose-built life science property in roughly a decade, but it never advanced beyond the pre-development stage.

ACORE, acting as administrative agent on the loan, filed a pre-foreclosure action against the ownership in April, alleging the borrowers had defaulted on $60 million in debt. Wednesday’s transfer resolves that action without a foreclosure auction, with the lender taking the assets directly.

The deal adds to a string of ownership changes involving Manhattan life sciences projects conceived in the years following the 2020 pandemic. Among them is Taconic Partners’ stalled Iron Horse Labs project at 309 East 94th Street on the Upper East Side, which has also changed hands in recent months. Sector activity continues against a broader commercial real estate backdrop in which services firms such as CBRE Group — trading recently around $140, up 1.21% on the day, with a market capitalization near $40.5 billion — track ongoing repricing across office and specialized development assets.

Deed-in-lieu transactions of this kind allow lenders to avoid the time and expense of foreclosure proceedings, while borrowers transfer title directly. The arrangement leaves ACORE in control of the site and its future direction, including whether any revised development plans for the parcels emerge.

What to watch

• Whether ACORE files new permits or revised development plans for 707 11th Avenue and 615 West 50th Street.
• Any listing or sale of the parcels by the lender’s ownership entity.
• Further restructurings involving post-2020 Manhattan life sciences projects, including the Iron Horse Labs site.

Source: original release