Crescent Heights signs $18M refi with Citibank for retail in Lenox Hill

Crescent Heights through the entity 165 E 66, LLC as borrower signed a refi loan with lender Citibank through the entity Citi Real Estate Funding Inc. valued at $18 million for the retail condominium unit at the base of the Hanley condominium at 165 East 66th Street in Lenox Hill, Manhattan. The retail spans the entire blockfront of Third Avenue from 66th Street to 67th Street.
The deal closed on September 18, 2024 and was recorded on September 20, 2024. The prior lender was JPMorgan Chase which held debt that had an original loan amount of $6 million.
The property has 16,938 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $1,062 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 Crescent Heights was Jonathan Newberg. The signatory for Citibank was Jonathan Misher.

The property

The retail condo in Lenox Hill has 16,938 square feet of built space according to a PincusCo analysis of city data. The parcel has a total lot size of 16,938 square feet. The city-designated market value for the property in 2022 is $6.6 million. The most recent loan totaled $6 million and was provided by First Republic Bank on March 4, 2022.

Violations and lawsuits

The property was involved in one lawsuit, 654941/2023, over the past two years. The suit was a $29.4 million money judgment concerning an attempted sale of the property, with the case filed on October 9, 2023, by Albert Rabizadeh, the contract vendee, against Crescent Heights. In addition, according to city public data, the property has not received any significant violations in the last year.
According to a letter filed by the attorney for Rabizadeh in April 2024, “This action arises out of the parties’ written Agreement of Purchase and Sale dated July 19, 2023 (the “Agreement”), pursuant to which Plaintiff agreed to purchase from Defendant a retail condominium unit (“Unit”) for $29.4 million. In section 7.1.5(e) of the Agreement, Defendant expressly “warrant[ed], represent[ed], and covenant[ed]” to Plaintiff that the rent roll for the Unit was $2,567,461.92 per year. See Agreement § 7.1.5(e) and Schedule 1 thereto. After the parties executed the Agreement and Plaintiff made an initial deposit of $1.47 million, Defendant provided Plaintiff with its Real Property Income and Expense (“RPIE”) filings provided to New York City taxing authorities (a condition to closing under § 8.1.11), which reflected annual rent of only $1,759,304 for 2021 and $1,864,121 for 2022 – a startling $800,000 less than the represented rent roll. These RPIE filings were only available to the owner of the property, i.e., Defendant, and Plaintiff did not receive this information until after the Agreement was executed.” The letter noted that if the actual income was lower, the property was worth less, or it was possible the owner was not reporting the full amount and the taxes would rise. The judge in April 2024 dismissed the case and Rabizadeh filed an appeal.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Lenox Hill, The bulk, or 34 percent of the 53.3 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 30 percent of the space. In sales, Lenox Hill has the highest sale turnover among other neighborhoods in the city with $4.3 billion in sales volume in the last two years. For development, Lenox Hill is the 6th most active neighborhood among other neighborhoods. It had 6 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

There are no active new building construction projects on this tax block.

All properties are specialty.

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