Investors buy $121M note secured by Cohen Brothers’ 475 Park Ave South

A group of investors including mortgage broker Robert Horowitz through the company Third Avenue Design Capital LLC bought a note with an original principal of $121 million from Flagstar Bank, secured by Cohen Brothers Realty’s leasehold on the office building (O4) at 475 Park Avenue South in Midtown South, Manhattan.
The deal closed on July 31, 2024 and was recorded on August 13, 2024. The property has 449,437 square feet of built space according to a PincusCo analysis of city data.
Cohen Brothers Realty is a ground tenant to landlord Solil Management through a ground lease signed in May 1967, which at the time stated the lease had an expiration in 2072. That 1967 lease was signed by Sherman Cohen, Mortimer Cohen and Edward Cohen.
Cohen Brothers, led today by Sherman’s son Charles Cohen, borrowed $121 million in June 2016 from New York Community Bank, which was subsequently acquired by Flagstar Bank.

The landlord, like many office property owners, is under financial pressure with the softness of the office market and a challenging lending market.

Robert Horowitz is a principal with the capital advisory firm Cooper Horowitz. In addition, he is an advisor to Cohen Brothers Realty, however this purchase was an arm’s length transaction and Cohen Brothers is not involved in the note buyer company, Horowitz told PincusCo.

“We are in discussions with the borrower 475 Building Company LLC to restructure the debt, but we are going to hold the note, we are not selling the note back to the borrower,” Horowitz said. He would not disclose the sale price of the note.
He said the firm Third Avenue Design Capital LLC, which he leads as managing member, is an active note buyer including in New York and Florida.

The property

The office building in Park Avenue South has 449,437 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 162 feet and is 161 feet deep with a total lot size of 21,558 square feet. The lot is irregular. The zoning is C6-4A which allows for up to 10 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 $92.7 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 $1,250 in ECB penalties and $5,850 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 $1 million on this tax lot.

The neighborhood

In Park Avenue South, The majority, or 67 percent of the 9 million square feet of commercial built space are office buildings, with elevator buildings next occupying 16 percent of the space. In sales, Park Avenue South has near average sales volume among other neighborhoods with $277.1 million in sales volume in the last two years and is the 27th highest in Manhattan. For development, Park Avenue South has had very little major development activity relative to other neighborhoods.It had 470,623 square feet of commercial and multi-family construction under development in the last two years, which represents 5 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of eight of the 16 commercial properties representing 1,665,923 square feet of the 1,774,400 square feet. The largest owner is Ogden Cap Properties, followed by Cohen Brothers Realty and then Hakimian Organization.
On the tax block, there was one new building construction project filed totaling 27,219 square feet. It is a 27,219 square-foot business (B) building submitted by Woo Sung Lee with plans filed November 28, 2012 and permitted December 12, 2018.

The majority, or 55 percent of the 1.8 million square feet of built space are elevator buildings, with office buildings next occupying 37 percent of the space.

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