Blackstone files $25M pre-foreclosure at FiDi high rise dev site

The Blackstone Group through the entity SIG CRE 2023 Venture LLC filed a $25 million pre-foreclosure action against a partnership, 267 Property Corp., which owns 265 Broadway in the Financial District, on which there are building plans for a 49-story development. The lender filed the complaint on Friday in New York State Supreme Court in Manhattan. According to the complaint, individuals associated with the loan are Buhm Jung Roe, Ralph Braha, Jack Dushey, Isaac S. Jemal and Joseph Nakash.

Case LINK

Court filings represent the position of one party and are not necessarily accurate or complete.

A partnership called 267 Property Corp., which remains the owner today, bought the five story, 29,000-square foot building located across the street from City Hall, for $700,000 from the Orphan Asylum Society on December 16, 1976.

In November 2005, investors including Isaac Jemal through an entity in care of his ISJ Management, paid $10.75 million for a stake in the building. After refinancings through the years, including the highest level of $25.5 million in December 2018, the principal was trimmed slightly in a deal with Signature Bank in January 2021 to $25 million.

B.J. Roe submitted a new building construction project for a 279-unit, 236,339 square-foot building at 267 Broadway. The plan was filed on December 30, 2016. It calls for the construction of a 747-foot tall, 49-story building and was filed with the New York City Department of Buildings under job number 121191450. The plan was disapproved on March 22, 2021.  Yimby reported in 2018 that the Gene Kaufman-designed project was stalled. The filing has conflicting information stating it is a hotel but also uses the R-2 code, for residential, though the schedule A does not note residential units.

The property

The existing office building in Financial District has 29,000 square feet of built space and 22,709 square feet of additional air rights for a total buildable of 51,730 square feet according to a PincusCo analysis of city data. The parcel has frontage of 49 feet and is 116 feet deep with a total lot size of 5,173 square feet. The lot is irregular. 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 $5.4 million. The most recent loan totaled $25 million and was provided by Signature Bank on January 20, 2021.

Prior sales and revenue

The 29,000-square-foot property generated revenue of $1 million or $36 per square foot, according to the most recent income and expense figures.

Violations and lawsuits

According to city public data, the property has received eight DOB violations, $1,250 in ECB penalties, and $12,250 in OATH penalties in the last year.

There were no lawsuits or bankruptcies filed against the property for the past 24 months.

The neighborhood

In Financial District, The majority, or 74 percent of the 79.9 million square feet of commercial built space are office buildings, with elevator buildings next occupying 15 percent of the space. In sales, Financial District has the 3rd highest sale turnover among other neighborhoods in the city with $2.3 billion in sales volume in the last two years. For development, Financial District is the 3rd most active neighborhood among other neighborhoods. It had 12.7 million square feet of commercial and multi-family construction under development in the last two years, which represents 16 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of three of the eight commercial properties representing 49,185 square feet of the 95,128 square feet. The largest owner is Flatiron Real Estate Advisors, followed by Joel Hammer and then Ralph Braha. On the tax block, there were two new building construction projects totaling 312,669 square feet. The largest is a 279-unit, 236,339 square-foot residential (R-2) building submitted by Ralph Braha and filed by B.J. Roe with plans filed December 30, 2016 and it has not been permitted yet. The second largest is a 86-unit, 76,330 square-foot residential (R-2) building submitted by Ralph Braha and filed by Roe Robert with plans filed November 13, 2014 and it has not been permitted yet.

The owner

The PincusCo database currently indicates that Ralph Braha owned at least five commercial properties with 22 residential units in New York City with 59,698 square feet and a city-determined market value of $17.8 million. (Market value is typically about 50% of actual value.) The portfolio has $40.5 million in debt, borrowed from Signature Bank and Popular Bank. Within the portfolio, the bulk, or 49 percent of the 59,698 square feet of built space are office properties, with mixed-use properties next occupying 35 percent of the space. They are all located in Manhattan.

The surrounding

Within a 400-foot radius of 267 Broadway, PincusCo identified three commercial real estate items of interests occurred over the past 24 months. Of those three items, one was for major renovation including a certificate of occupancy change. It was a permit issued on March 22, 2024 for the $789,650 renovation of 18,749-square-foot residential (R-2) building with six residential units at 62 Reade Street. Of those three items, two were loans above $5 million totaling $22 million. The most recent of the two was Manouchehr Malekan in which borrowed $13 million from Flagstar Bank secured by one condo unit in the 31,235-square-foot, three-unit mixed-use building (RC) on 253 Broadway on March 22, 2024.

Direct link to the property’s ACRIS page and link to DOB NOW portal.