Lalezarian Properties pays $33.5M to Princeton International for office in Murray Hill

Lalezarian Properties through the entity First And River LLC paid $33.5 million to Princeton International Properties through the entity Jericho Office, LLC for office building (O6) at 650 First Avenue in Murray Hill, Manhattan.
The deal closed on March 23, 2023 and was recorded on March 27, 2023. The property has 98,400 square feet of built space and 17,641 square feet of additional air rights for a total buildable of 116,060 square feet according to PincusCo analysis of city data. The sale price per built square foot is $340 and the price per buildable square foot is $288 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 PincusCo database currently indicates that Lalezarian Properties owned at least 13 commercial properties in New York City with 832,047 square feet and a city-determined market value of $254.5 million. (Market value is typically about 50% of actual value.) The portfolio has $579.9 million in debt, with top three lenders as JPMorgan Chase, New York Community Bank, and Bank of New York Mellon respectively. Within the portfolio, the bulk, or 92 percent of the 832,047 square feet of built space are elevator properties, with walkup properties next occupying 7 percent of the space. The bulk, or 61 percent of the built space, is in Manhattan, with Brooklyn next at 39 percent of the space.

The signatory for Princeton International Properties was David Tawfik. The signatory for Lalezarian Properties was Kevin Lalezarian. David Tawfik is president of Princeton International. Princeton bought the building in 2000 for $13.45 million.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Lalezarian Properties purchased three properties in three transactions for a total of $19.1 million and has no record it sold any properties over the past 24 months.
The seller Princeton International Properties had not purchased any other properties and sold one property in one transaction for a total of $79.7 million over the same time period. The 98,400-square-foot property generated revenue of $4.4 million or $45 per square foot, according to the most recent income and expense figures.

The property

The 650 1st Avenue parcel has frontage of 50 feet and is 125 feet deep with a total lot size of 11,606 square feet. The zoning is C1-9 which allows for up to 2 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 $21.3 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 received $1,250 in ECB penalties and $1,550 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 $5 million on this tax lot.

The neighborhood

In Murray Hill, the majority, or 57 percent of the 11.6 million square feet of commercial built space are elevator buildings, with office buildings next occupying 21 percent of the space. In sales, Murray Hill has 3.1 times the average sales volume among other neighborhoods with $1.1 billion in sales volume in the last two years and is the 13th highest in Manhattan. For development, Murray Hill has had very little major development activity relative to other neighborhoods.It had 284,268 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

There are no active new building construction projects on this tax block.

The majority, or 85 percent of the 231,340 square feet of built space are office buildings, with industrial buildings next occupying 15 percent of the space.

The seller

The PincusCo database currently indicates that Princeton International Properties owned at least two commercial properties in New York City with 477,748 square feet and a city-determined market value of $144.8 million. (Market value is typically about 50% of actual value.) The portfolio has $212.5 million in debt, borrowed from Signature Bank and Wells Fargo. Within the portfolio, all identified are office properties. They are all located in Manhattan.

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