Three Niagara County commercial properties owned by developer Nick Sinatra and members of the Nanula family have lost two-thirds of their value because of plummeting revenues, potentially putting the future of a $23 million mortgage backing the properties at risk.
The two commercial office complexes comprising the Woodlands Corporate Center, along with an industrial property at 7049 Williams Road – all in Wheatfield – were originally valued by an appraiser at $33.2 million in April 2015. That was shortly before Sinatra and the Nanulas’ Nanco Enterprises borrowed $23.3 million from an arm of Five Mile Capital Partners of Stamford, Conn., to refinance an existing loan.
But that loan has been troubled almost from the start, according to reports from research firm Trepp LLC and ratings agency KBRA, noting a history of delinquencies and “watchlist” concerns dating back to the first quarter of 2016 – just half a year after it was originated.
It’s more than 60 days late in payments and now faces “imminent default,” with a special servicer handling the loan and hiring attorneys “to proceed with enforcement of remedies,” while also talking with the borrowers “regarding a potential resolution,” according to Trepp.
The current balance is $22.6 million. But a new appraisal sought by the lender earlier this year and just reported by Trepp cut the value of the three properties to just $11.1 million – less than half of the loan balance and just one-third of the original appraisal.