NEW YORK CITY-Following a foreclosure process and a settlement agreement, Newmark Grubb Knight Frank Capital Group has been retained by Miami Beach-based special servicer LNR Partners to market a distressed note on an overleveraged building in the Flatiron District, GlobeSt.com has learned. The brokerage is teaming up with Auction.com to sell the note secured by 246 Fifth Ave., a six-story, 32,049-square-foot property located on the southwest corner of 28^th Street.

“This is an asset that has had a bulls eye on it for a long time now,” an unnamed capital markets source tells GlobeSt.com. Records from Real Capital Analytics show that the property was purchased by Ronald Goldman in 2007 for $20 million using a $14.5 million loan, and was subsequently transferred to special servicing in 2010 after default. Then in early 2011, a foreclosure process was initiated, and brokerage Eastern Consolidated was tapped to market the building on behalf of the borrower. However, a source says the special servicer has “gotten to the point while they are selling the note, they are selling the opportunity to get the agreement quickly because they have a settlement agreement in place.”

While the original balance on the loan was $14.5 million, a source says the price has now escalated to $18.5 million in terms of the total that is outstanding, including interest. fees and penalties. Now, NGKF’s David Noonan, Jennifer Schwartzman and Paul Gojkovich are exclusively handling the note sale.