Effy Jewelry owner signs $75M refi with Signature Bank for office in Midtown West, pays off SLG loan

Fatollah Hematian, the owner of Effy Jewelry, through the entity 590 Fifth Holding LLC as borrower signed a refi loan with lender Signature Bank valued at $75 million for the office building (O6) at 590 Fifth Avenue in Midtown West, Manhattan.
The deal closed on August 12, 2022 and was recorded on August 19, 2022. The prior lender was SL Green Realty which held debt that had an original loan amount of $73 million. The property has 93,123 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $805 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 owner bought the property on November 29, 2007, for $90 million. The signatory for Fatollah Hematian was Fatollah Hematian. The signatory for Signature Bank was Kim Carson.

Prior sales and revenue

The 93,123-square-foot property generated revenue of $11.7 million or $125 per square foot, according to the most recent income and expense figures.

The property

The 590 5th Avenue parcel has frontage of 55 feet and is 100 feet deep with a total lot size of 5,496 square feet. 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 $41.1 million.The most recent loan totaled $82.2 million and was provided by Wells Fargo on October 22, 2021.

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 $2,450 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 West, the majority, or 73 percent of the 77.7 million square feet of commercial built space are office buildings, with hotel buildings next occupying 13 percent of the space. In sales, Midtown West has the 5th highest sale turnover among other neighborhoods in the city with $2.1 billion in sales volume in the last two years. For development, Midtown West is the 2nd most active neighborhood among other neighborhoods. It had 12 million square feet of commercial and multi-family construction under development in the last two years, which represents 15 percent of the neighborhood’s built space. There was one 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 15 of the 36 commercial properties representing 879,471 square feet of the 1,879,636 square feet. The largest owner is Stawski Partners, followed by Jack Elo and then SL Green Realty.
There are two active new building construction projects totaling 227,777 square feet. The largest is a 534-unit, 168,897-square-foot R-1 building developed by David Rothstein with plans filed November 20, 2020 and permitted October 6, 2021. The second largest is a 58,880-square-foot M building developed by Michael Mcmenamin with plans filed June 1, 2016 and it has not been permitted yet.

The majority, or 91 percent of the 1.9 million square feet of built space are office buildings, with mixed-use buildings next occupying 5 percent of the space.

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