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Riverton Goes on Auction Block

NEW YORK CITY-A state Supreme Court judge has ordered the foreclosure sale of the 1,288-unit multifamily complex, which is carrying $240.6 million in debt.

By Paul Bubny | Updated on February 03, 2010

NEW YORK CITY-The Riverton Houses multifamily complex in Harlem is to be sold in a foreclosure auction, State Supreme Court Justice Richard Braun ordered Tuesday. The seven-building complex is carrying $240.6 million in debt, according to court documents; the New York Times reported that the sale is expected to take place next month.

Built by the Metropolitan Life Insurance Co. in the late 1940s to serve black tenants who could not gain admission to Peter Cooper Village/Stuyvesant Town, also built by Met Life, the 1,288-unit Riverton was bought for $135 million in 2005 by developer Stellar Management. Stellar refinanced the property a year later with a $225-million first mortgage and a $25-million loan, intending to convert more than half the rent-controlled units to market-rate rents.

However, the pace of conversion was slower than expected, reportedly reaching only 10% of the rent-controlled units by the summer of 2008, and Riverton’s ownership defaulted on the debt in early 2009. Following the default, special servicer CWCapital filed for foreclosure and receivership in February ’09, according to Fitch ratings.

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