Capstone Equities Foreclosing on Vornado’s 140 Crosby Street

A month after buying the $75 million loan on Madison Capital and Vornado’s “Gateway to SoHo” office and retail building, Joshua Zamir’s Capstone Equities is moving to foreclose.

Capstone on Monday filed a lawsuit claiming Richard Wagman’s Madison Capital and Vornado defaulted on their debt at 140 Crosby Street when they failed to pay off the loan at its maturity date in September 2024.

It’s a particularly sticky situation for the borrowers. Wagman and Vornado Realty L.P., which is the operating arm of the company, signed a guarantee on the debt in 2019.

Capstone said it “reserves the right to seek a deficiency judgment” against the guarantors at the completion of the foreclosure action.

A representative for Madison Capital could not be immediately reached, and a spokesperson for Vornado declined to comment.

Located at the corner of Broadway and Houston Street, 140 Crosby Street rose on a lot that sat vacant for many years. It is situated next to a highly visible Soho mainstay building that welcomed shoppers with ads painted on its broad, exposed wall for brands like Hollister and DKNY.

Vornado and Madison developed the six-story, 36,000-square-foot building in 2019, leasing the retail to the JBL audio store and Citizens Bank. The property was just 25 percent leased at the end of 2024, according to the latest annual report from Vornado, which owns half the property.

The partners had put the building up for sale last summer, around the time the maturity was coming due and seeking a price tag of about $100 million, but no deal ever materialized.

The borrowers took out the $75 million loan in 2019 with Société Générale and signed a bad boy guarantee, which makes them liable for losses on the loan if they commit prohibited acts like fraud or misappropriation of funds. Capstone, which bought the loan from the French bank in late July, did not allege any violations of the “bad boy” carve outs in its lawsuit, even though it said it reserved the right to enforce the guarantee.

Zamir’s Capstone, meanwhile, has been active buying distressed properties and non-performing loans.

The company in 2023 took over the Whale Building in Sunset Park after acquiring the debt and foreclosing on Elie Schwartz’s Nightingale Properties. Zamir followed the same playbook earlier this month when he took over Savana’s 141 Willoughby office tower in Downtown Brooklyn after buying the building’s debt and foreclosing.