Fortress takes control of FiDi dev site from Bizzi & Partners, Cindat, valued at $598.2M

Fortress Investment Group through the entity 125 Greenwich Owner LLC acquired control of the development at 125 Greenwich Street in the Financial District from Bizzi & Partners Development through the entity VS 125 LLC valued at $598.2 million. The development had been the subject of a long-running foreclosure suit and a number of mechanic’s liens. The recapitalization includes $313 million in construction financing that Northwind Group provided, but that has not yet been recorded.

On the lot, there is one active new building construction project for a 273-unit, 358,388 square-foot residential (R-2) condominium building. The project was first submitted in June 5, 2012 and permitted August 8, 2017. On the tax lot, the most recent condominium plan was filed by VS 125 LLC to create 275 residential units in a building at 125 Greenwich Street in Financial District, Manhattan, called 125 Greenwich Condominiumthat has a $856.2 million sellout, according to an November 13, 2015 submission to the New York State Attorney General.

The transfer closed on January 31, 2023 and was recorded on February 13, 2023. The property has 455,815 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $1,312 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 seller bought the property on August 28, 2014, for $183.9 million. The signatory for Bizzi & Partners Development was Davide Bizzi. The signatory for Fortress Investment Group was Scott Desiderio.
Fortress, prior to this transaction was the senior debt holder, and converted its debt position into equity, and according to The Real Deal, injected additional funds, and through this took control of the project valued at $598.2 million. The project has a long history. In 2014, an investor group including Michael Shvo, Bizzi & Partners, and Howard Lorber’s New Valley paid Fisher Brothers $183.9 million for the site at 22 Thames Street, planning residential condos with a sellout of $872 million and a retail condo priced at $30 million. (page 195) of the $872 million.

The Real Deal additionally reported that the construction was 85 percent complete. The U.S. Immigration Fund, an EB-5 regional center operator, held two mezzanine loans and will retain a stake in the development. According to court filings, the “Mezzanine Loan shall mean the mezzanine financing to Sole Member of up to $194,000,000 from Mezzanine Lender, which shall be subject to an intercreditor agreement acceptable in all respects to Lenders in their sole and absolute discretion.  (page 23)

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.
The seller Bizzi & Partners Development purchased four properties in two transactions for a total of $12 million and sold two properties in two transactions for a total of $28.7 million over the same time period.

The property

The 22 Thames Street parcel has frontage of 82 feet and is 119 feet deep with a total lot size of 9,086 square feet. The lot is irregular. The zoning is C5-5 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 $80 million.

The block

On this tax block, PincusCo has identified the owners of one of the five commercial properties representing 181,725 square feet of the 1,402,317 square feet. The identified owner is Yucaipa Companies.
On the tax block, there were two new building construction projects totaling 608,621 square feet. The largest is a 273-unit, 358,388-square-foot R-2 building developed by Steven Dellasalla with plans filed June 5, 2012 and permitted August 8, 2017. The second largest is a 250,233-square-foot B building developed by Richard Gladstone with plans filed August 29, 2014 and permitted December 13, 2017.

The majority, or 62 percent of the 1.4 million square feet of built space are office buildings, with elevator buildings next occupying 33 percent of the space.

The seller

The PincusCo database currently indicates that Bizzi & Partners Development owned at least four commercial properties in New York City with 24,839 square feet and a city-determined market value of $7.7 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 100 percent of the 24,839 square feet of built space are M1 properties, with industrial properties next occupying 0 percent of the space. They are all located in Manhattan.

The buyer

The PincusCo database currently indicates that Fortress Investment Group owned at least two commercial properties in New York City with 133,403 square feet and a city-determined market value of $29.1 million. (Market value is typically about 50% of actual value.) The portfolio has $64.9 million in debt, borrowed from MetLife. Within the portfolio, all identified are elevator properties. They are all located in Manhattan.

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