Gateside has given up roughly $44 million worth of condominium units at The Royale on the Upper East Side in a move to head off foreclosure, shifting a chunk of its Lenox Hill holdings straight into its lender’s hands. The transfer involves multiple high-end apartments at 188 East 64th Street and, as of June 30, 2026, looks more like a negotiated workout than a fast-track auction.
As first reported by Crain's, the surrendered units carry an estimated market value of about $44 million and were turned over as part of a strategy to stave off foreclosure. Reporter Julianne Cuba links the handoff to a larger creditor workout tied to Gateside’s stake in the building.
The Royale itself is a full-service high-rise in Lenox Hill, known for a hefty amenity package and a long track record of sales at the address. StreetEasy lists the property at 188 East 64th Street and shows current listings and recent closings that underline the tower’s luxury profile.
What the surrender can mean
Handing units back to a lender is a standard tool in real estate workouts, often used instead of grinding through years of foreclosure litigation. These deals can be structured as deeds in lieu or other negotiated assignments. Public filings and legal primers note that once a lender takes possession or otherwise secures title, it typically gains the ability to decide whether to hold, manage, or resell the apartments. SEC filings and legal explainers outline how lender control and condo lien priorities can shift in these kinds of workouts.
What to watch next
It is not yet clear which creditor will ultimately oversee or bring the surrendered units to market. Crain's casts the move as a negotiated solution rather than a sudden foreclosure sale. Upcoming property filings and other public records will reveal who ends up on the title and how those high-end condos are eventually positioned and priced.
