Lender Kairos takes control of Friars Club building in Midtown East with $15.5M transfer

Lender Kairos Investment Management through the entity Kairos Friars Club RE LLC acquired through a judicial foreclosure from the Friars Club through the entity Friars National Association Inc., the specialty building (P9) at 57 East 55th Street in Midtown East, Manhattan. The transfer value was $15.5 million, which in a foreclosure sale is often the judgment amount, not the actual market value.
The deal closed on February 21, 2025 and was recorded on March 4, 2025. The property has 14,541 square feet of built space and 18,641 square feet of additional air rights for a total buildable of 33,170 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $1,065 and the price per buildable square foot is $467 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 signatory for the court, representing the former Friars Club interests was receiver Ian Lagowitz. The signatory for Kairos Credit Strategies Operating Partnership was Jonathan Needell. The contract date was January 10, 2025. The Friars Club borrowed $13 million from Kairos Investment Management Company in 2021.  Foreclosure case in Manhattan federal court, 1:23-cv-2960.

Northgate Real Estate Group’ Greg Corbin marketed the property for the foreclosure auction.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Kairos had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Friars Club had not purchased any other properties and had not sold any properties over the same time period.

The property

The specialty building in Midtown East has 14,541 square feet of built space and 18,641 square feet of additional air rights for a total buildable of 33,170 square feet according to a PincusCo analysis of city data. The parcel has frontage of 33 feet and is 100 feet deep with a total lot size of 3,317 square feet. The zoning is C5-2.5 which allows for up to 12 times floor area ratio (FAR) for commercial The property is in the Individual Landmark. The city-designated market value for the property in 2022 is $3.7 million. The most recent loan totaled $13 million and was provided by Kairos Credit Strategies Operating Partnership on June 25, 2021.

Violations and lawsuits

The property was involved in two lawsuits and zero bankruptcies over the past two years. The highest value suit was a $13 million commercial foreclosure concerning a loan filed on April 7, 2023, by Kairos Investment Management against Friars Club. In addition, according to city public data, the property has received one DOB violation and $1,200 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 Midtown East, The majority, or 81 percent of the 62.6 million square feet of commercial built space are office buildings, with hotel buildings next occupying 7 percent of the space. In sales, Midtown East has the 2nd highest sale turnover among other neighborhoods in the city with $2.8 billion in sales volume in the last two years. For development, Midtown East is the 2nd most active neighborhood among other neighborhoods. It had 17.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 28 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of six of the eight commercial properties representing 1,889,037 square feet of the 2,316,136 square feet. The largest owner is Deutsche Finance America, followed by RXR Realty and then Blackstone Group.
There are no active new building construction projects on this tax block.

The majority, or 100 percent of the 2.3 million square feet of built space are office buildings, with mixed-use buildings next occupying 0 percent of the space.

The seller

The PincusCo database currently indicates that Friars Club owned at least one commercial property in New York City with 14,541 square feet and a city-determined market value of $3.7 million. (Market value is typically about 50% of actual value.) The portfolio has $28 million in debt, with top three lenders as Kairos Credit Strategies Operating Partnership, Titan Capital ID, and Houlihan and O’Malley Commercial Services respectively. The portfolio consists of at least a single P9 property. It is located in Manhattan.

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