Lalezarian Properties signs $50M rehab construction loan for office in Murray Hill

Lalezartian Properties through the entity First And River LLC as borrower signed a rehabilitation construction loan with lender TD Bank valued at $50 million for the office building (O6) at 650 First Avenue in Murray Hill, Manhattan.
The deal closed on March 23, 2023 and was recorded on April 3, 2023. The property has 98,400 square feet of built space and 17,639 square feet of additional air rights for a total buildable of 116,050 square feet according to a PincusCo analysis of city data. The loan price per built square foot is $508 and the price per buildable square foot is $430 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.)

This is a rehab construction loan for a property Lalezarian bought on the same day for $33.5 million.

Prior sales and revenue

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 parcel has two buildings with frontage of 50 feet and is 125 feet deep with a total lot size of 11,605 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 $18.3 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 $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 $1 million on this tax lot.

The neighborhood

In Murray Hill, The majority, or 54 percent of the 11 million square feet of commercial built space are elevator buildings, with office buildings next occupying 22 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 3 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of one of the three commercial properties representing 98,400 square feet of the 231,340 square feet. The identified owner is Lalezarian Properties.
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.

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