Marx Realty obtains additional $26.1M in debt from Metlife for office in Grand Central

Marx Realty through the entity 708 Third Avenue Associates, LLC as borrower signed a loan with lender MetLife through the entity Metlife Real Estate Lending LLC valued at $26.1 million for the office building 10 Grand Central at 708 Third Avenue in Grand Central, Manhattan.
The deal closed on May 4, 2022 and was recorded on May 31, 2022.The property has 359,326 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $72 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 May 4, 2007, for $74.2 million.
This is an “additional advance” which is part of a maximum loan of $140 million, of which $110 million was previously advanced. Craig M. Deitelzweig, president of the company, was the signatory for Marx. Deitelzweig spoke with PincusCo Live last month.

Prior sales and revenue

The 359,326-square-foot property generated revenue of $22.4 million or $62 per square foot, according to the most recent income and expense figures.

The property

The 708 3rd Avenue parcel has frontage of 100 feet and is 170 feet deep with a total lot size of 17,070 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 $103.7 million. The most recent loan totaled $110 million and was provided by MetLife on July 31, 2019.

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 three DOB violations, $6,050 in ECB penalties, and $6,350 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on January 7, 2016. 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 Grand Central, the majority, or 74 percent of the 47.4 million square feet of commercial built space are office buildings, with residential elevator buildings next occupying 11 percent of the space. In sales, Grand Central has the highest sale turnover among other neighborhoods in the city with $2.4 billion in sales volume in the last two years. For development, Grand Central has had very little major development activity relative to other neighborhoods.It had 557,614 square feet of commercial and multi-family construction under development in the last two years, which represents 1 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of five of the 12 commercial properties representing 569,492 square feet of the 1,393,612 square feet. The largest owner is Marx Realty, followed by Masterworks Development and then Pan Am Equities. There are two active new building construction projects totaling 71,089 square feet. The largest is a 35,622-square-foot B building developed by Todd Polakoff with plans filed November 14, 2017 and it has not been permitted yet. The second largest is a 90-unit, 35,467-square-foot R-1 building developed by Sam Chang with plans filed May 9, 2013 and it has not been permitted yet.

The majority, or 88 percent of the 1.3 million square feet of built space are office buildings, with residential elevator buildings next occupying 6 percent of the space.

Surrounding

Within a 400-foot radius of 708 3rd Avenue, PincusCo identified four commercial real estate items of interests occurred over the past 24 months.
Of those four items, one was for major renovation including a certificate of occupancy change. It was a permit application filed on December 15, 2021 for the $1.8 million renovation of 33,387-square-foot E building with zero residential units at 150 East 45th Street.
Of those four items, three were loans above $5 million totaling $68.5 million. The most recent of the three was Masterworks Development which borrowed $50 million from Carval Investors secured by one condo unit in the 105,626-square-foot, three-unit mixed-use building (RC) on 451 Lexington Avenue on June 8, 2021.

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