Eretz Group signs $34.4M refi for office in Garment District, halts pre-foreclosure

Abraham Talassazan’s Eretz Group through the entity Sheva 7 LLC as borrower signed a loan modification and extension with trustees for the securitized trust Comm 2014-CCRE16, valued at $34.4 million for the office building (O6) at 252 West 37th Street in Garment District, Manhattan. This modification halted a pre-foreclosure action.
The special servicer for the $41 million loan filed a pre-foreclosure action in April 2024. That case was dismissed with the modification of this loan.

Cantor Commercial originated the loan December 31, 2013, then securitized it into Comm 2014-CCRE16.

Arnold Shulkin is with LNR Partners. Eretz is facing another foreclosure case at 224 West 57th Street, which remains active.
The deal closed on August 21, 2024 and was recorded on August 29, 2024. The prior lender was Comm 2014-CCRE16 which held debt that had an original loan amount of $41 million.The property has 139,629 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $246 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 February 28, 2007, for $33.7 million. The signatory for Eretz Group was Abraham Talassazan. The signatory for Comm 2014-CCRE16 was Arnold Shulkin.

The property

The office building in Garment District has 139,629 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 93 feet and is 98 feet deep with a total lot size of 9,131 square feet. The zoning is M1-6 which allows for up to 10 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $32.6 million.

Violations and lawsuits

The property was involved in one lawsuit over the past two years. The suit was a $41 million commercial foreclosure concerning a loan filed on April 1, 2024, by COMM 2014-CCRE16 and LNR Partners against Eretz Group and Abraham Talassazan. In addition, according to city public data, the property has received one DOB violation, $10,030 in ECB penalties, and $11,580 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on November 18, 2015. 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 Garment District, The majority, or 69 percent of the 52.3 million square feet of commercial built space are office buildings, with hotel buildings next occupying 13 percent of the space. In sales, Garment District has 2 times the average sales volume among other neighborhoods with $532 million in sales volume in the last two years and is the 16th highest in Manhattan. For development, Garment District is the 4th most active neighborhood among other neighborhoods. It had 7.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 14 percent of the neighborhood’s built space. There were four 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 seven of the 15 commercial properties representing 2,104,003 square feet of the 2,386,056 square feet. The largest owner is George Comfort & Sons, followed by GFP Real Estate and then Investcorp International Realty.
There are no active new building construction projects on this tax block.

The majority, or 94 percent of the 2.4 million square feet of built space are office buildings, with elevator buildings next occupying 4 percent of the space.

The borrower

The PincusCo database currently indicates that Eretz Group owned at least four commercial properties in New York City with 495,188 square feet and a city-determined market value of $169.4 million. (Market value is typically about 50% of actual value.) The portfolio has $90 million in debt, borrowed from Aareal Capital. Within the portfolio, all identified are office properties. They are all located in Manhattan.

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