Fortress, Slate pay $78M to BlackRock for elevator rentals in Lenox Hill, Turtle Bay

Fortress Investment Group and Slate Property Group paid $78 million to the global investment fund BlackRock for an elevator building in Lenox Hill and another in Turtle Bay in two separate transactions.

In the first, Fortress Investment Group and Slate Property Group through the entity Crefma1 231 East 76th Owner LLC paid $49.1 million to BlackRock through the entity 231 East 76th Street, LLC for the midblock 90-unit residential elevator building at 231 East 76th Street in Lenox Hill, Manhattan.
The deal closed on May 26, 2022 and was recorded on June 10, 2022. The property has 82,065 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $598 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 Real Deal reported on the sale in May, identifying the brokers as William Shanahan and Daniel Kaplan of CBRE.
In the second transaction, Fortress Investment Group and Slate Property Group through the entity Crefma1 340 East 52nd Owner LLC paid $28.9 million to BlackRock through the entity 340 E 52nd Street, LLC for midblock 65-unit residential elevator building at 340 East 52nd Street in Turtle Bay, Manhattan. The deal closed on May 26, 2022 and was recorded on June 10, 2022. The property has 51,338 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $562 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 BlackRock was Debra Mistretta. The signatory for Fortress Investment Group and Slate Property Group was David Scheible.

Prior sales and revenue

Prior to this transaction, Pincusco has no record that the buyer Fortress Investment Group had purchased any other properties and has no record it sold any properties over the past 24 months. So far this year, Fortress lent $39 million to Macklowe Properties and $79.6 million to East End Capital
The seller BlackRock had not purchased any other properties and sold four properties in four transactions for a total of $234.3 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes John Kent, head officer and Cathy Bernstein, officer. The business entities are Rose Associates, Inc. and 231 East 76th Street Llc.

The property

The 231 East 76th Street parcel has frontage of 130 feet and is 102 feet deep with a total lot size of 13,281 square feet. The zoning is R8B which allows for up to 4 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $16.5 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 not received any significant violations 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 Lenox Hill, the majority, or 56 percent of the 91.2 million square feet of commercial built space are residential elevator buildings, with specialty buildings next occupying 17 percent of the space. In sales, Lenox Hill has the 3rd highest sale turnover among other neighborhoods in the city with $2.2 billion in sales volume in the last two years. For development, Lenox Hill has had very little major development activity relative to other neighborhoods.It had 436,108 square feet of commercial and multi-family construction under development in the last two years, which represents 0.48 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other residential elevator buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of seven of the 30 commercial properties representing 64,270 square feet of the 360,767 square feet. The largest owner is Parkoff Organization, followed by Palin Enterprises and then Ted Cannavo. There are no active new building construction projects on this tax block.

The majority, or 68 percent of the 519,986 square feet of built space are residential elevator buildings, with residential walkup buildings next occupying 22 percent of the space.

The buyer

The PincusCo database currently indicates that Slate Property Group owned at least 53 commercial properties with 1,787,507 square feet and a city-determined market value of $437.5 million. (Market value is typically about 50% of actual value.) The portfolio has $955.9 million in debt, with top three lenders as Mack Real Estate Group, Signature Bank, and Heitman LLC respectively. Within the portfolio, the bulk, or 66 percent of the 1,787,507 square feet of built space are elevator properties, with walkup properties next occupying 16 percent of the space. The bulk, or 55 percent of the built space, is in Manhattan, with Brooklyn next at 32 percent of the space.

Surrounding

Within a 400-foot radius of 231 East 76th Street, PincusCo identified seven commercial real estate items of interests occurred over the past 24 months.
Of those seven items, two were sales above $5 million totaling $72.6 million. The most recent of the two was Naftali Group which bought the 11,430-square-foot, 17-unit rental (C7) on 251 East 77th Street for $9 million from Sky Management on January 12, 2022.
Of those seven items, five were loans above $5 million totaling $86.1 million. The most recent of the five was Eastmore Owners Corp. which borrowed $16 million from Investors Bank secured by one condo unit in the 238,741-square-foot, 296-unit mixed-use building (RM) on 240 East 76th Street on February 23, 2022.

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