Citibank files $180M pre-foreclosure at RFR’s 475 Fifth Avenue

Citibank filed a $180 million pre-foreclosure action alleging a loan it provided to RFR Holding in 2022 to purchase an interest in 475 Fifth Avenue in Grand Central, Manhattan, was in a maturity default. The loan matured on June 9, 2024, according to the complaint, and was not repaid.

Case LINK

Court filings represent the position of one party and are not necessarily accurate or complete. RFR Holding has a large portfolio in New York City, but it has been under pressure as other owners have been with the loss in value of office space and the higher lending rates.

This Citibank filing is the sixth pre-foreclosure action PincusCo has tracked since 2023 for RFR Holding, including a $224 million loan at 522 Fifth Avenue, and others.

Despite such challenges, large landlords often find a way to more forward, for example Wharton Properties sold its stake in 717 Fifth Avenue that was threatened by a $300 million foreclosure action, for more than three times the maturity-defaulted loan, or $963 million.

The property

The office building in Grand Central has 220,413 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 104 feet and is 140 feet deep with a total lot size of 14,675 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 $130.8 million. The most recent loan totaled $180 million and was provided by Citibank on May 19, 2022.

Prior sales and revenue

The 220,413-square-foot property generated revenue of $21.5 million or $98 per square foot, according to the most recent income and expense figures.

Development

For the tax lot building, it received its initial certificate of occupancy on January 24, 2014.

Violations and lawsuits

According to city public data, the property has received one DOB violation and $350 in OATH penalties in the last year.

The property was involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $4.5 million money judgment concerning a sale filed on November 21, 2022, by RFR Holding against Nuveen.

The neighborhood

In Grand Central, The majority, or 83 percent of the 44.4 million square feet of commercial built space are office buildings, with hotel buildings next occupying 8 percent of the space. In sales, Grand Central has near average sales volume among other neighborhoods with $723.4 million in sales volume in the last two years and is the 11th highest in Manhattan. For development, Grand Central is the 10th most active neighborhood among other neighborhoods. It had 4.7 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.

The block

On this tax block, PincusCo has identified the owners of 10 of the 19 commercial properties representing 2,365,691 square feet of the 2,731,781 square feet. The largest owner is Apf Properties, followed by Diamondrock Hospitality Company and then Eretz Group. There are no active new building construction projects on this tax block.

The owner

The PincusCo database currently indicates that Rfr Holding owned at least 19 commercial properties in New York City with 2,859,746 square feet and a city-determined market value of $1.1 billion. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 87 percent of the 2,859,746 square feet of built space are office properties, with hotel properties next occupying 8 percent of the space. The bulk, or 96 percent of the built space, is in Manhattan, with Brooklyn next at 4 percent of the space.

The surrounding

Within a 400-foot radius of 475 Fifth Avenue, PincusCo identified three commercial real estate items of interests occurred over the past 24 months. One of those three items was a sale which Torchlight Investors bought three condo units in the 9,100-square-foot, 185-unit mixed-use building (RM) on 445 5th Avenue and zero other properties for $40 million from Harbor Group International on September 1, 2023. Of those three items, two were loans above $5 million totaling $377.1 million. The most recent of the two was PBC USA Real Estate in which borrowed $359.6 million from Reznik Paz Nevo Trusts secured by the 616,352-square-foot, 17-unit office building (O4) on 452 5th Avenue and one other property on May 30, 2024.

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