Aurora Capital signs $17.7M refi for two properties in Midtown East

Aurora Capital Associates through the entity 714 Lex Acquisition LLC as borrower signed a refi loan with lender New York Community Bank valued at $17.7 million for two properties including the retail building (K4) at 714 Lexington Avenue and the mixed-use building (K2) at 720 Lexington Avenue in Midtown East, Manhattan. This loan does not cover the property in between them, 716 Lexington Avenue, owned by Solil Management.
The deal closed on April 1, 2020 and was recorded on March 17, 2023. The two properties have 11,106 square feet of built space and 16,677 square feet of additional air rights for a total buildable of 27,790 square feet according to PincusCo analysis of city data. The loan price per built square foot is $1,593 and the price per buildable square foot is $636 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 Aurora Capital Associates was Robert Cayre. The signatory for New York Community Bank was Daniel M. Bagatta.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 720 Lexington Avenue.

Prior sales and revenue

The two properties with a total of 11,106 square feet of built space generated revenue of $2.2 million per year or $198 per square foot.

The property

The 720 Lexington Avenue parcel has frontage of 20 feet and is 68 feet deep with a total lot size of 1,404 square feet. The zoning is C5-2 which allows for up to 10 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 $7.5 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have received $1,250 in ECB penalties and $1,250 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 Midtown East, the majority, or 81 percent of the 61.6 million square feet of commercial built space are office buildings, with hotel buildings next occupying 7 percent of the space. In sales, Midtown East has the 2nd highest sale turnover among other neighborhoods in the city with $3.6 billion in sales volume in the last two years. For development, Midtown East is the 2nd most active neighborhood among other neighborhoods. It had 15.4 million square feet of commercial and multi-family construction under development in the last two years, which represents 25 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other mixed-use buildings in the past 12 months.

The block

On the tax block of 720 Lexington Avenue, PincusCo has identified the owners of 12 of the 22 commercial properties representing 1,058,746 square feet of the 1,535,632 square feet. The largest owner is Moinian Group, followed by Vornado Realty Trust and then Solil Management.
There are no active new building construction projects on this tax block.

The majority, or 81 percent of the 1.3 million square feet of built space are retail buildings, with elevator buildings next occupying 13 percent of the space.

The borrower

The PincusCo database currently indicates that Aurora Capital Associates owned at least 16 commercial properties in New York City with 990,570 square feet and a city-determined market value of $272.1 million. (Market value is typically about 50% of actual value.) The portfolio has $363.8 million in debt, with top three lenders as Deutsche Pfandbriefbank, New York Community Bank, and Wells Fargo respectively. Within the portfolio, the bulk, or 31 percent of the 990,570 square feet of built space are retail properties, with office properties next occupying 25 percent of the space. The bulk, or 63 percent of the built space, is in Manhattan, with Brooklyn next at 34 percent of the space.

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