Cohen Brothers signs $100M refi with Fortress for office in Midtown East

Cohen Brothers Realty through the entity 135 East 57th Street LLC as borrower signed a refi loan with lender Fortress Investment Group through the entity Fortress Credit Corp. valued at $100 million for the office building (O4) at 135 East 57th Street in Midtown East, Manhattan.
The deal closed on September 15, 2022 and was recorded on September 27, 2022. The prior lender was Fortress Investment Group which held debt that had an original loan amount of $90 million. The property has 397,354 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $251 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 Cohen Brothers Realty was Charles S. Cohen. The signatory for Fortress Investment Group was Avraham Dreyfuss. The financing includes a document indicating WeWork remains a tenant in the building.

Prior sales and revenue

The 397,354-square-foot property generated revenue of $35 million or $88 per square foot, according to the most recent income and expense figures.

The property

The 135 East 57th Street parcel has frontage of 215 feet and is 200 feet deep with a total lot size of 26,731 square feet. The lot is irregular. 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 $185.1 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 one DOB violation, $5,000 in ECB penalties, and $11,330 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 82 percent of the 61.5 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 4.2 times the average sales volume among other neighborhoods with $1.4 billion in sales volume in the last two years and is the 9th highest in Manhattan. 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 22 commercial properties representing 1,058,746 square feet of the 1,535,632 square feet. The largest owner is Vornado Realty Trust, followed by Solil Management and then Moinian Group.
There are no active new building construction projects on this tax block.

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