David Werner pays $140M to Kayden family for fee under Pfizer building, borrowing $135M

David Werner Real Estate Investments through the entity 235 Fee Owner LLC paid $140 million to the family of the late real estate investor Bernard Kayden through the entity Seaver Realty LLC for the ground leased fee under the former Pfizer office building (O4) at 235 East 42nd Street in Grand Central, Manhattan. The expected use is conversion/addition, where Werner and Metro Loft Management are developing approximately 910 residential units.
The deal closed on January 28, 2025 and was recorded on February 19, 2025. The property has 672,462 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $208 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 the Kayden family was Michael Field . The contract date was August 21, 2024. Michael Field is affiliated with Field Real Estate Holdings, an asset management company based in Manhattan. The Kayden family holds the assets of the late real estate investor Bernard Kayden.

In 2021, Werner extended the lease under the property with the Kayden family as landlord for 60 years.

In this transaction, Werner is buying the fee. Now, a Metro Loft Management and Werner joint venture controls the leasehold and Werner alone owns the fee interest, according to a press release from Northwind Group, a lender.

Simultaneously with the purchase, Werner borrowed $135 million as a “first mortgage, acquisition loan” from Northwind Group secured by the fee interest, according to a press release from Northwind Group. City records as of publication only reflect recorded debt totaling $100 million.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer David Werner Real Estate Investments purchased three properties in three transactions for a total of $221 million and sold one property in one transaction for a total of $275 million over the past 24 months.
The seller Kayden family had not purchased any other properties and had not sold any properties over the same time period.

The property

The office building in Grand Central has 672,462 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 100 feet and is 225 feet deep with a total lot size of 37,657 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 $222.7 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received one DOB violation and $9,975 in OATH penalties in the last year.

Development

On the lot, there is one active major alteration construction project, M01075133, for a 927-unit, 664,653 square-foot J-2 building. The project was submitted by Metro Loft Management and filed by Robert Travis with plans filed July 3, 2024 and it has not been permitted yet.

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 3.4 times the average sales volume among other neighborhoods with $895.2 million in sales volume in the last two years and is the 10th highest in Manhattan. For development, Grand Central is the 8th most active neighborhood among other neighborhoods. It had 5.6 million square feet of commercial and multi-family construction under development in the last two years, which represents 13 percent of the neighborhood’s built space. There were five pre-foreclosure suit filed among other office buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of three of the four commercial properties representing 1,261,818 square feet of the 1,403,226 square feet. The two identified owners are David Werner Real Estate Investments and Durst Organization.
There are no active new building construction projects on this tax block.

All properties are office.

The buyer

The PincusCo database currently indicates that Metro Loft Management owned at least nine commercial properties with 1,148 residential units in New York City with 3,737,473 square feet and a city-determined market value of $993.7 million. (Market value is typically about 50% of actual value.) The portfolio has $595.7 million in debt, with top three lenders as Deutsche Bank, Athene Holding, and Bank Hapoalim respectively. Within the portfolio, the bulk, or 72 percent of the 3,737,473 square feet of built space are office properties, with elevator properties next occupying 28 percent of the space. They are all located in Manhattan.
The PincusCo database currently indicates that David Werner Real Estate Investments owned at least five commercial properties with 143 residential units in New York City with 1,574,046 square feet and a city-determined market value of $500.3 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 91 percent of the 1,574,046 square feet of built space are office properties, with elevator properties next occupying 8 percent of the space. They are all located in Manhattan.

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