Margules Properties signs $14M refi for 3 walkups in Lenox Hill

Margules Properties through the entity First Avenue Partners, LLC as borrower signed a refi loan with lender Flushing Bank valued at $14 million for three residential walkup properties including the 14-unit residential walkup building (C7) at 1500 First Avenue in Lenox Hill, Manhattan, nine-unit residential walkup building (C7) at 1502 First Avenue in Lenox Hill, Manhattan, and eight-unit residential walkup building (C7) at 401 East 78th Street in Lenox Hill, Manhattan.
The deal closed on July 29, 2022 and was recorded on August 8, 2022. The prior lender was Amalgamated Bank which held debt that had an original loan amount of $13.5 million. The three properties have 23,206 square feet of built space and 39,439 square feet of additional air rights for a total buildable of 62,650 square feet according to PincusCo analysis of city data. The loan price per built square foot is $603 and the price per buildable square foot is $223 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 Margules Properties was Eric S. Margules. The signatory for Flushing Bank was Maura Nicolosi.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 401 East 78th Street.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development include Eric Margules, head officer and Elizabeth Novotny, site manager. The business entity is First Avenue Partners, Llc. The three properties with a total of 23,206 square feet of built space generated revenue of $1.3 million per year or $57 per square foot.

The property

The 401 East 78th Street parcel has frontage of 30 feet and is 52 feet deep with a total lot size of 1,565 square feet. The zoning is C1-9 which allows for up to 2 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 $4.3 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have received $1,300 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 block

On the tax block of 401 East 78th Street, PincusCo has identified the owners of 12 of the 34 commercial properties representing 74,347 square feet of the 297,016 square feet. The largest owner is Scharfman Organization, followed by Icon Realty Management and then Sassouni Management.
There is one active new building construction project totaling 9,849 square feet. It is a 12-unit, 9,849-square-foot R-2 building developed by Todd Cohen with plans filed December 30, 2014 and it has not been permitted yet.

The majority, or 49 percent of the 282,174 square feet of built space are walkup buildings, with elevator buildings next occupying 47 percent of the space.

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