Leser Group, David Marom sign $58M construction loan for 65-unit project in Kips Bay

The Leser Group and David Marom through the entity Elem 340 LLC as borrower signed a new construction loan with lender Ponce Bank valued at $58 million for the 65-unit project at 609 Second Avenue in Kips Bay, Manhattan.
On the lot, there is one active new building construction project for a 65—unit, 66,200 square-foot R-2 building. The project was developed by David Marom with plans filed March 6, 2019 and permitted March 30, 2021.
The deal closed on March 17, 2023 and was recorded on March 28, 2023. The prior lender was Valley National Bank which held debt that had an original loan amount of $19.8 million.

The owner bought the property on October 7, 2014, for $26.5 million. The signatory for Leser Group was David Marom and Abraham Leser. The signatory for Ponce Bank was Steven A. Tsavaris.

The property

The 609 2nd Avenue parcel has frontage of 76 feet and is 75 feet deep with a total lot size of 5,561 square feet. The zoning is C1-8A which allows for up to 2 times floor area ratio (FAR) for commercial and up to 7.52 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $3.1 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 one DOB violation, $6,875 in ECB penalties, and $8,075 in OATH penalties in the last year.

The neighborhood

In Kips Bay, the majority, or 51 percent of the 21.7 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 32 percent of the space. In sales, Kips Bay has 2.4 times the average sales volume among other neighborhoods with $815.7 million in sales volume in the last two years and is the 17th highest in Manhattan. For development, Kips Bay has had very little major development activity relative to other neighborhoods.It had 530,493 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 17 of the 30 commercial properties representing 724,013 square feet of the 1,040,151 square feet. The largest owner is Slate Property Group, followed by S.W. Management and then Mark Zweibon.
On the tax block, there were three new building construction projects totaling 218,228 square feet. The largest is a 144-unit, 134,998-square-foot R-2 building developed by Xiaocheng Zhou with plans filed May 2, 2019 and permitted August 28, 2019. The second largest is a 32-unit, 57,901-square-foot R-2 building developed by Asher Schepansky with plans filed July 20, 2016 and it has not been permitted yet.

The majority, or 82 percent of the 1 million square feet of built space are elevator buildings, with walkup buildings next occupying 13 percent of the space.

The borrower

The PincusCo database currently indicates that Leser Group owned at least 29 commercial properties in New York City with 949,411 square feet and a city-determined market value of $97.9 million. (Market value is typically about 50% of actual value.) The portfolio has $545.2 million in debt, with top three lenders as UMB Bank, Tel Aviv Stock Exchange bondholders, and Axos Bank respectively. Within the portfolio, the bulk, or 47 percent of the 949,411 square feet of built space are elevator properties, with specialty properties next occupying 35 percent of the space. The bulk, or 65 percent of the built space, is in Brooklyn, with Bronx next at 35 percent of the space.

Correction: A prior version of this post indicated the total number of units was 30, but that was an outdated development plan. The current number of units planned is 65.

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