Benenson Capital buys $51M note secured by Waterman Interests 400 Park Ave

UPDATED: Benenson Capital Partners through the entity 400 Park Leasehold Lender LLC bought a note with an original principal of $51 million from Bank of America secured by Waterman Interests’ office building (O4) at 400 Park Avenue in Midtown East, Manhattan.
The deal closed on December 28, 2022 and was recorded on January 30, 2023. The prior lender was Bank of America which held debt that had an original loan amount of $51 million. The property has 214,392 square feet of built space according to PincusCo analysis of city data.

The signatory for Waterman Interests for the prior loan was Philip M. Waterman III. Waterman Interests borrowed $51 million from Bank of America in 2017. The note buyer, Benenson Capital Partners, is also the fee owner of the property. Benenson as landlord signed a 75-year master lease with Waterman Interests as tenant in 2013, which the city valued at $150 million for tax purposes.

A Cushman & Wakefield team of Adam Spies, Joshua King and Avery Silverstein brokered the note sale on behalf of Bank of America.

Prior sales and revenue

The 214,392-square-foot property generated revenue of $23.3 million or $109 per square foot, according to the most recent income and expense figures.

The property

The 400 Park Avenue parcel has frontage of 100 feet and is 125 feet deep with a total lot size of 12,552 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 $104.4 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 $915 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on November 25, 2013. 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 $3.4 billion in sales volume in the last two years. For development, Midtown East is the most active neighborhood among other neighborhoods. It had 15.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 24 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other retail buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of 12 of the 73 commercial properties representing 654,125 square feet of the 2,433,013 square feet. The largest owner is Qatar Investment Authority, followed by Vornado Realty Trust and then Boston Properties.
There are no active new building construction projects on this tax block.

The majority, or 86 percent of the 2.1 million square feet of built space are office buildings, with retail buildings next occupying 11 percent of the space.

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