Lender Torchlight acquires Grand Central retail condos from Harbor Group, valued at $40M

Lender Torchlight Investors through the entity Dof VI 445 Fifth, LLC acquired three retail condo at 445 Fifth Avenue in Grand Central, Manhattan from former borrower Harbor Group International through the entity 445 Fifth Avenue Associates, LLC, at a valuation of $40 million. The retail condos are at the base of a mixed-use building with 174 residential units, three retail units and eight other commercial condominium units. The transfer documents do not state this is a deed-in-lieu of foreclosure, but it is the transfer of ownership from borrower to lender at the valuation of the last loan.
The deal closed on August 23, 2023 and was recorded on September 1, 2023. The three retail units have 16,899 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $2,367 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 Harbor Group International was T. Richard Litton Jr.. The signatory for Torchlight Investors was Gianluca Montalti. The contract date was August 23, 2023.

Torchlight acquired the $40 million loan from CIBC, the Canadian Imperial Bank of Commerce, on March 18, 2021. CIBC originally provided the loan in December 2015, to finance HGI’s $68 million purchase from Thor Equities of the three retail condos.
This is the same building where Jon Stryker, the heir to a multi-billion-dollar medical fortune, bought eight commercial condominium units for just under $60 million from the New York Public Library.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Torchlight Investors purchased one property in one transaction for a total of $21.1 million and sold one property in one transaction for a total of $83.5 million over the past 24 months.
The seller Harbor Group International purchased one property in one transaction for a total of $760 million and had not sold any properties over the same time period.

The property

The retail condo in Grand Central has 16,899 square feet of built space according to a PincusCo analysis of city data. The parcel has a total lot size of 9,100 square feet. The city-designated market value for the property in 2022 is $2.8 million.

Violations and lawsuits

The properties were involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $574,441 money judgment concerning a retail lease filed on August 31, 2022, by Glen-Gery and Brickworks Limited against Harbor Group International. In addition, according to city public data, the properties have not received any significant violations 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 Grand Central, The majority, or 83 percent of the 43.5 million square feet of commercial built space are office buildings, with hotel buildings next occupying 8 percent of the space. In sales, Grand Central has 2.4 times the average sales volume among other neighborhoods with $868.9 million in sales volume in the last two years and is the 15th highest in Manhattan. For development, Grand Central has 2.6 times the average amount of major developments relative to other neighborhoods and is the 13th highest in Manhattan. It had 2.7 million square feet of commercial and multi-family construction under development in the last two years, which represents 6 percent of the neighborhood’s built space.

The block

On the tax block of 445 5th Avenue, PincusCo has identified the owners of four of the 13 commercial properties representing 1,476,829 square feet of the 2,373,376 square feet. The largest owner is Vornado Realty Trust, followed by Skyline Developers and then Larry Wohl.
On the tax block, there was one new building construction project filed totaling 35,392 square feet. It is a 95-unit, 35,392 square-foot hotel/dormitory/shelter (R-1) building submitted by Arbalest Capital and filed by David Stein with plans filed December 10, 2014 and permitted March 29, 2017.

The majority, or 98 percent of the 2.4 million square feet of built space are office buildings, with hotel buildings next occupying 2 percent of the space.

The seller

The PincusCo database currently indicates that Harbor Group International owned at least seven commercial properties with 194 residential units in New York City with 1,312,913 square feet and a city-determined market value of $479.2 million. (Market value is typically about 50% of actual value.) The portfolio has $655 million in debt, with top three lenders as Goldman Sachs, AIG, and New York Community Bank respectively. Within the portfolio, the bulk, or 86 percent of the 1,312,913 square feet of built space are office properties, with elevator properties next occupying 10 percent of the space. The bulk, or 86 percent of the built space, is in Manhattan, with Brooklyn next at 13 percent of the space.

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