Ashkenazy loses leasehold at 635 Madison in Lenox Hill to lender in foreclosure sale

The securitized lender in care of LNR Partners, Series 2014-C24, through the entity JPMBB 2014-C24 Madison Avenue, LLC acquired the leasehold of the office building (O6) at 635 Madison Avenue in Lenox Hill, Manhattan. This was a foreclosure sale resulting from case 850274/2021 in New York State Supreme Court in Manhattan. The final judgment amount was $99.8 million.
The sale closed on June 12, 2024 and was recorded on July 1, 2024. The property has 149,881 square feet of built space according to a PincusCo analysis of city data.
The signatory for the court was Matthew D. Hunter III. This is a foreclosure sale of the ground lease, which the New York Post reported in 2008 that Ashkenazy said it would buy for just under $70 million, and at the time it had 44 years remaining. Ashkenazy then borrowed $90 million in 2014, originated by JPMorgan Chase. Matthew D. Hunter III is an attorney and referee in this auction.

The property

The office building in Lenox Hill has 149,881 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 100 feet and is 90 feet deep with a total lot size of 9,087 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 $113.8 million.

The neighborhood

In Lenox Hill, The bulk, or 34 percent of the 53.3 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 30 percent of the space. In sales, Lenox Hill has the highest sale turnover among other neighborhoods in the city with $4.4 billion in sales volume in the last two years. For development, Lenox Hill is the 7th most active neighborhood among other neighborhoods. It had 5.9 million square feet of commercial and multi-family construction under development in the last two years, which represents 11 percent of the neighborhood’s built space. There was one 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 nine of the 10 commercial properties representing 1,049,947 square feet of the 1,202,696 square feet. The largest owner is Vornado Realty Trust, followed by Titan Golden Capital and then L&L Holding.
There are no active new building construction projects on this tax block.

The majority, or 95 percent of the 1.2 million square feet of built space are office buildings, with hotel buildings next occupying 4 percent of the space.

The seller

The PincusCo database currently indicates that Ashkenazy Acquisition owned at least seven commercial properties in New York City with 481,635 square feet and a city-determined market value of $88.1 million. (Market value is typically about 50% of actual value.) The portfolio has $132.1 million in debt, with top three lenders as Benefit Street Partners, Wilmington Trust, and Bank of Montreal respectively. Within the portfolio, the bulk, or 71 percent of the 481,635 square feet of built space are retail properties, with industrial properties next occupying 18 percent of the space. The bulk, or 44 percent of the built space, is in Queens, with Manhattan next at 28 percent of the space.

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