Naftali Group plans 69-unit building on ground-leased land in Kips Bay

Michael Naftali’s Naftali Group submitted a new building construction project for a 69-unit, 86,651 square-foot residential (R-2) building at 201 East 23rd Street in Kips Bay, Manhattan. The plan was filed with the New York City Department of Buildings on February 8, 2024 under job number M00992159. It calls for the construction of a 19-story building. The project is described in the filing as: to erect new multi story, multi family mixed use building. Michael Witek, executive vice president of construction at Naftali Group, filed the plans. The architect is COOKFOX Architects.

The property

The existing retail building in Kips Bay has 14,456 square feet of built space and 57,816 square feet of additional air rights for a total buildable of 72,270 square feet according to a PincusCo analysis of city data. The parcel has two buildings with frontage of 74 feet and is 97 feet deep with a total lot size of 7,227 square feet. The lot is irregular. The zoning is C2-8A 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 $15.1 million. The most recent loan totaled $6 million and was provided by Regnum Partners on June 10, 2022.

Prior sales and revenue

Naftali Group as ground tenant signed a 99-year ground lease with landlord BNS Real Estate valued at $12.5 million, on August 22, 2023.

The 14,456-square-foot property generated revenue of $1.4 million or $94 per square foot, according to the most recent income and expense figures.

Violations and lawsuits

According to city public data, the property has received $50 in OATH penalties in the last year.

There were no lawsuits or bankruptcies filed against the property for the past 24 months.

The neighborhood

In Kips Bay, The bulk, or 50 percent of the 21.5 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 32 percent of the space. In sales, Kips Bay has near average sales volume among other neighborhoods with $228.5 million in sales volume in the last two years and is the 30th highest in Manhattan. For development, Kips Bay has near average amount of major developments among other neighborhoods and is the 27th highest in Manhattan. It had 664,731 square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of eight of the 12 commercial properties representing 175,803 square feet of the 328,176 square feet. The largest owner is Arbor Management Acquisition Company Aka Amac Holdings, followed by C. Gershon Company and then Croman Real Estate. On the tax block, there was one new building construction project filed totaling 86,651 square feet. It is a 69-unit, 86,651 square-foot residential (R-2) building submitted by Michael Witek with plans filed February 8, 2024 and it has not been permitted yet.

The owner

The PincusCo database currently indicates that Naftali Group owned at least 12 commercial properties with 371 residential units in New York City with 859,112 square feet and a city-determined market value of $171 million. (Market value is typically about 50% of actual value.) The portfolio has $961 million in debt, with top three lenders as HSBC Bank, Bank Hapoalim, and Bank OZK respectively. Within the portfolio, the bulk, or 65 percent of the 859,112 square feet of built space are elevator properties, with development properties next occupying 27 percent of the space. The bulk, or 68 percent of the built space, is in Manhattan, with Brooklyn next at 32 percent of the space.

The surrounding

Within a 400-foot radius of 305 3 Avenue, PincusCo identified four commercial real estate items of interests occurred over the past 24 months. One of those four items was a sale which Aya bought the 17,526-square-foot, 35-unit rental (D2) on 217 East 22nd Street for $11.8 million from Kokot Realty Enterprises on June 28, 2022. Of those four items, three were loans above $5 million totaling $86.9 million. The most recent of the three was SMA Equities in which borrowed $70.6 million from JLL secured by the 80,912-square-foot, 109-unit rental (D6) on 397 Third Avenue on January 18, 2024.

Direct link to the property’s ACRIS page and link to DOB NOW portal.