Lexin Capital signs $78M loan with Deutsche Pfandbriefbank for office in Midtown East

Lexin Capital through the entity Lexin NY 551 LLC as borrower signed a loan with lender Deutsche Pfandbriefbank Ag valued at $78 million for the office building (O6) at 551 Madison Avenue in Midtown East, Manhattan.
The deal closed on May 31, 2022 and was recorded on July 6, 2022. The property has 125,495 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $621 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 owner bought the property on January 19, 2017, for $155 million.

The property

The 551 Madison Avenue parcel has frontage of 75 feet and is 100 feet deep with a total lot size of 7,541 square feet. The zoning is C5-3 which allows for up to 15 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 $56.1 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 $1,560 in ECB penalties and $2,060 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 Midtown East, the majority, or 77 percent of the 65.5 million square feet of commercial built space are office buildings, with residential elevator buildings next occupying 8 percent of the space. In sales, Midtown East has 4.3 times the average sales volume among other neighborhoods with $1.4 billion in sales volume in the last two years and is the 9th highest in Manhattan. For development, Midtown East is the most active neighborhood among other neighborhoods. It had 12.3 million square feet of commercial and multi-family construction under development in the last two years, which represents 19 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of four of the 11 commercial properties representing 1,234,990 square feet of the 2,680,775 square feet. The largest owner is Olayan Group, followed by Bayerische Versorgungskammer and then Oestreicher Properties. There are no active new building construction projects on this tax block.

The majority, or 99 percent of the 2.3 million square feet of built space are office buildings, with specialty buildings next occupying 1 percent of the space.

Surrounding

Within a 400-foot radius of 551 Madison Avenue, PincusCo identified 10 commercial real estate items of interests occurred over the past 24 months.
Of those 10 items, six were sales above $5 million totaling $170.3 million.
Of those 10 items, four were loans above $5 million totaling $623 million. The most recent of the four was Robert A. Siegel which borrowed $9 million from JPMorgan Chase secured by the 8,000-square-foot, five-unit office building (O5) on 538 Madison Avenue on June 10, 2022.

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