July auction set for HFZ’s Turtle Bay retail with $29.9M judgment

A court-appointed state court foreclosure case referee set a July auction for the retail and garage condominium units at the base of the Halcyon, a 123-unit condominium Ziel Feldman’s HFZ Capital Group developed, which was completed about 10 years ago. He kept these two commercial units at 305 East 51st Street, which fell into default and now have a judgment of $29.9 million, according to court records.

Case 850126/2022 LINK

The referee, Howard W. Kingsley, set the date for July 23, 2025, according to the notice of sale posted yesterday on the state court website.

In July 2017, HFZ Capital Group borrowed $20.5 million from Malverne Federal Savings Bank secured by the 15,532-square-foot retail unit and the 7,479-square-foot garage unit. In 2021 Rialto Capital Management through the entity RREF IV – D MLVN, LLC bought the loan, and the following year filed the pre-foreclosure action. The final judgment of foreclosure was signed May 15, 2025.

The property

The retail property in Turtle Bay has 15,532 square feet of built space according to a PincusCo analysis of city data. PincusCo cannot determine the lot area of the 976 2 Avenue parcel at this time. The city-designated market value for the property in 2022 is $11.3 million.

The neighborhood

In Turtle Bay, The bulk, or 36 percent of the 9 million square feet of commercial built space are specialty buildings, with elevator buildings next occupying 32 percent of the space. In sales, Turtle Bay has near average sales volume among other neighborhoods with $114.8 million in sales volume in the last two years and is the 33rd highest in Manhattan. For development, Turtle Bay has near average amount of major developments among other neighborhoods and is the 39th highest in Manhattan. It had 186,875 square feet of commercial and multi-family construction under development in the last two years, which represents 2 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of eight of the 19 commercial properties representing 322,930 square feet of the 423,637 square feet. The largest owner is Kasey Khampadith Chaleunsouk, followed by Katherine Cartagena and then Pinnacle Group. There are no active new building construction projects on this tax block.

The surrounding

Within a 400-foot radius of 976 2 Avenue, PincusCo identified six commercial real estate items of interests occurred over the past 24 months. Of those six items, one was in new building development. It was a new building permit issued on January 4, 2024 for a 117,895-square-foot residential (R-2) building with 114 residential units at 300 East 50th Street. Of those six items, two were sales above $5 million totaling $25 million. The most recent of the two was Ludo Usa LLC which bought the 2,075-square-foot, one-unit townhouse (A4) on 242 East 52nd Street for $20 million from 242 Property LLC on December 11, 2023. Of those six items, three were loans above $5 million totaling $70.8 million. The most recent of the three was Stellar Management in which borrowed $21.5 million from Citizens Bank secured by the 88,300-square-foot, 87-unit rental (D6) on 320 East 52nd Street on March 19, 2025.

Direct link to the property’s ACRIS page and link to DOB NOW portal.