Metro Loft, Werner, sign $720M construction loan for resi conversions in Grand Central, $540M recorded

Metro Loft Management and David Werner Real Estate Investments signed a new construction loan with Madison Realty Capital for $720 million for the conversion of two office buildings to residential with 1,602 units. Of that total, $540 million was recorded in property records in which the borrowers through the entity 219 Owner LLC signed a new construction loan with lender Madison Realty Capital through the entity 219 And 235 East 42nd Lender 1 LLC for two office properties including the office building (O4) at 235 East 42nd Street and the office building (O3) at 219 East 42nd Street in Grand Central, Manhattan.
The deal closed on May 16, 2025 and was recorded on May 29, 2025. The prior lender was Northwind Group which held debt that had an original loan amount of $75 million.The two properties have 972,462 square feet of built space and 11,206 square feet of additional air rights according to a PincusCo analysis of city data.
The signatory for Metro Loft Management and David Werner Real Estate Investments was Nathan Berman . The signatory for Madison Realty Capital was David Speiser. The total construction loan is $720 million, according to a press announcement Madison Realty Capital released on May 25, 2025. “Construction of the property is currently underway and is expected to be completed by the fourth quarter of 2027.”  A $75 million Northwind Group loan from August 2024  was assigned to Madison Realty Capital.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties for the past 24 months. In addition, according to city public data, the properties have received two DOB violations, $6,250 in ECB penalties, and $20,660 in OATH penalties in the last year.

Development

For the tax lot buildings, one out of the two buildings received a initial certificate of occupancy in the last ten years. On these lots, there are two active new building construction projects and major alteration projects with initial costs more than $5 million, totaling 978,083 square feet. The largest, M01075133, is a major alteration project for a 927-unit, 664,653 square-foot J-2 building submitted by Metro Loft Management and filed by Robert Travis with plans filed July 3, 2024 and it has not been permitted yet. The second largest, M01075131, is a major alteration project for a 536-unit, 465,792 square-foot R-2 building submitted by Metro Loft Management and filed by Robert Travis with plans filed July 3, 2024 and it has not been permitted yet.

The neighborhood

In Grand Central, The majority, or 83 percent of the 44.4 million square feet of commercial built space are office buildings, with hotel buildings next occupying 8 percent of the space. In sales, Grand Central has the 6th highest sale turnover among other neighborhoods in the city with $1.5 billion in sales volume in the last two years. For development, Grand Central is the 8th most active neighborhood among other neighborhoods. It had 5.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 13 percent of the neighborhood’s built space. There were four pre-foreclosure suit filed among other office buildings in the past 12 months.

The block

On the tax block of 235 East 42nd Street, PincusCo has identified the owners of three of the four commercial properties representing 1,261,818 square feet of the 1,403,226 square feet. The two identified owners are David Werner Real Estate Investments and Metro Loft Management.
There are no active new building construction projects on this tax block.

All properties are office.

The borrower

The PincusCo database currently indicates that Metro Loft Management owned at least nine commercial properties with 2,468 residential units in New York City with 3,354,367 square feet and a city-determined market value of $866.4 million. (Market value is typically about 50% of actual value.) The portfolio has $595.7 million in debt, with top three lenders as Deutsche Bank, Athene Holding, and Bank Hapoalim respectively. Within the portfolio, the bulk, or 69 percent of the 3,354,367 square feet of built space are office properties, with elevator properties next occupying 31 percent of the space. They are all located in Manhattan.
The PincusCo database currently indicates that David Werner Real Estate Investments owned at least six commercial properties with 133 residential units in New York City with 2,061,669 square feet and a city-determined market value of $643.1 million. (Market value is typically about 50% of actual value.) The portfolio has $100 million in debt, borrowed from Northwind Group. Within the portfolio, the bulk, or 94 percent of the 2,061,669 square feet of built space are office properties, with elevator properties next occupying 6 percent of the space. They are all located in Manhattan.

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