Adler Group signs $55M refi loan with Apple Bank for office in Lenox Hill

Adler Group through the entity 654 Madison Avenue Associates L.P. as borrower signed a refi loan with lender Apple Bank for Savings valued at $55 million for the office building (O4) at 654 Madison Avenue in Lenox Hill, Manhattan.
The deal closed on October 7, 2022 and was recorded on October 13, 2022. The prior lender was Apple Bank for Savings which held debt that had an original loan amount of $55 million. The property has 136,733 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $402 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The signatory for Adler Group was Robert Liberman. The signatory for Apple Bank for Savings was Cynthia Wang.

Prior sales and revenue

The 136,733-square-foot property generated revenue of $15 million or $110 per square foot, according to the most recent income and expense figures.

The property

The 654 Madison Avenue parcel has frontage of 73 feet and is 95 feet deep with a total lot size of 6,974 square feet. The zoning is C5-3 which allows for up to 15 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $80.1 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property since September of 2020. In addition, according to city public data, the property has received seven DOB violations, $7,500 in ECB penalties, and $9,235 in OATH penalties in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $5 million on this tax lot.

The neighborhood

In Lenox Hill, the bulk, or 35 percent of the 51.9 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 28 percent of the space. In sales, Lenox Hill has the highest sale turnover among other neighborhoods in the city with $3.3 billion in sales volume in the last two years. For development, Lenox Hill has 1.6 times the average amount of major developments relative to other neighborhoods and is the 16th highest in Manhattan. It had 1.6 million square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space. There were three pre-foreclosure suit filed among other office buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of eight of the 18 commercial properties representing 1,049,517 square feet of the 1,753,462 square feet. The largest owner is Jenel Management, followed by Etoile 660 Madison LLC and then Partyoftwo LLC.
On the tax block, there was one new building construction project filed totaling 178,046 square feet. It is a 43-unit, 178,046-square-foot R-2 building developed by Bryan Ramm with plans filed December 7, 2012 and permitted July 29, 2014.

The majority, or 49 percent of the 1.3 million square feet of built space are hotel buildings, with office buildings next occupying 48 percent of the space.

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