American Strategic Investment Co. Agrees to Foreclosure Settlement
The agreement includes property transfer terms and releases the company from nearly $100 million in debt obligations.
September 15, 2025
American Strategic Investment Co. Resolves Loan Default with Property Foreclosure Settlement
American Strategic Investment Co. has reached a settlement that brings closure to a defaulted $99 million loan tied to its Manhattan property at 1140 Avenue of the Americas. The resolution moves the property into foreclosure proceedings while releasing the company and its subsidiaries from future liability on the debt.
The agreement was finalized on September 8, 2025, following legal action initiated by Wilmington Trust on behalf of the lenders. After earlier notices of default and acceleration were issued, Wilmington Trust filed a foreclosure complaint in New York State Supreme Court. The complaint named the borrower—ARC NYC1140SIXTH, LLC, a subsidiary of the company—and its operating partnership, New York City Operating Partnership, L.P., which guarantees the loan.
Under the settlement terms, the borrower consented to the immediate appointment of a court-approved receiver and to a judgment of foreclosure and sale. The court approved the receiver on September 11. This opens the door to a public auction of the property and allows for an efficient handoff of day-to-day operations.
Clear Terms, Structured Timeline
The agreement lays out a clear path forward. The company has 60 days to complete the necessary legal filings. Once the property is officially transferred through the foreclosure process, both the borrower and guarantor will be released from their obligations under the loan documents—including the notes, mortgage, guaranty, and related agreements.
There’s also a timeline in place for final releases. Ninety-one days after the deed transfer or another form of property disposition, all remaining claims tied to the loan will be waived, with one exception: environmental liabilities. Those obligations remain in place.
The company will work directly with Wilmington Trust and the receiver to ensure the transition is handled smoothly. With the legal framework now in place, the focus shifts to executing the remaining steps and completing the property transfer.
For American Strategic Investment Co., this marks a structured exit from a non-performing asset—one that resets the balance sheet without extending litigation or ongoing exposure.
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