Rector Square to exit foreclosure

By MAX GROSS

Last Updated: 12:47 AM, August 5, 2010

Posted: 12:47 AM, August 5, 2010

The long, painful nightmare of Rector Square, the 303-unit Battery Park City condo at 225 Rector St., looks like it is about to end.

The remaining 230 unsold units are expected to be auctioned off in September as part of a deal that will take the building out of foreclosure.

Residents are "still very, very upset," says Marc Held, a lawyer with Lazarowitz & Manganillo who represented buyers in the foreclosure proceeding. "They're happy that the building will get out of foreclosure, but they're furious that they can't resell their units, that there's no reserve fund, that their money was stolen. But at least they see there's light at the end of the tunnel."

The building's debt is about $134 million -- an amount that the building's lender, Anglo Irish, is unlikely to see from a bulk buyer.

An informal appraisal done at a hearing with a court referee estimated unfinished units would probably go for $400 per square foot -- a far cry from the $1,000 per square foot that finished units were getting at the height of the market.

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