L&L Holding cuts debt on Murray Hill office building to $160M

L&L Holding Company through the entity Third Avenue Tower Owner, LLC as borrower signed a refi loan with lender Credit Agricole through the entity Credit Agricole Corporate And Investment Bank valued at $160 million for the office building (O4) at 600 Third Avenue in Murray Hill, Manhattan.
The deal closed on March 2, 2023 and was recorded on March 6, 2023. L&L Holding Company’s prior lender was Capital One which held debt that had an original loan amount of $175 million.
The property has 493,860 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $323 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 L&L Holding Company was Robert T. Lapidus. The signatories for Credit Agricole were Amadou M. Diop and Theodore M. Vandermel.

Prior sales and revenue

The 493,860-square-foot property generated revenue of $37.8 million or $77 per square foot, according to the most recent income and expense figures.

The property

The 600 3rd Avenue parcel has frontage of 197 feet and is 158 feet deep with a total lot size of 24,673 square feet. The lot is irregular. 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 $143 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 $3,790 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 Murray Hill, the majority, or 57 percent of the 11.6 million square feet of commercial built space are elevator buildings, with office buildings next occupying 21 percent of the space. In sales, Murray Hill has 3 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 2 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of seven of the 68 commercial properties representing 165,367 square feet of the 1,597,825 square feet. The largest owner is Suppiah Kameshwara, followed by Steven Tatti and then Sol Goldman Investments.
On the tax block, there were two new building construction projects totaling 42,209 square feet. The largest is a 16-unit, 21,903-square-foot R-2 building developed by Adam Gordon with plans filed January 30, 2020 and it has not been permitted yet. The second largest is a 40-unit, 20,306-square-foot R-1 building developed by Terence Cheng with plans filed October 10, 2017 and it has not been permitted yet.

The majority, or 76 percent of the 1.5 million square feet of built space are office buildings, with hotel buildings next occupying 16 percent of the space.

The borrower

The PincusCo database currently indicates that L&L Holding Company owned at least two commercial properties in New York City with 1,796,196 square feet and a city-determined market value of $378.5 million. (Market value is typically about 50% of actual value.) The portfolio has $1.4 billion in debt, with top three lenders as KKR & Co., MassMutual, and Aareal Capital respectively. Within the portfolio, all identified are office properties. They are all located in Manhattan.

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