Naftali Group signs $67.5M construction loan for mixed-use in Kips Bay

Naftali Group through the entity 201 East 23rd Street Tenant LLC as ground lease tenant and as borrower signed a construction loan with lender First Citizens Bank through the entity First Citizens Bank & Trust Company valued at $67.5 million for the 69-unit development project at 307 Third Avenue in Kips Bay, Manhattan.
On the lot, there is one active new building construction project, M00992159, for a 69-unit, 86,651 square-foot R-2 building. The project was submitted by Naftali Group and filed by Michael Witek with plans filed February 8, 2024 and permitted August 19, 2024.
The deal closed on February 5, 2025 and was recorded on February 25, 2025.
The signatory for Naftali Group was Michael Naftali.

In addition to the construction loan, the fee owner borrowed $6 million from a separate lender, Regnum Partners on June 10, 2022.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received $13,250 in ECB penalties and $17,200 in OATH penalties in the last year.

The neighborhood

In Kips Bay, The bulk, or 50 percent of the 21.6 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 had very little sales volume relative to other neighborhoods with $183 million in sales volume in the last two years. For development, Kips Bay has had very little major development activity relative to other neighborhoods.It had 908,368 square feet of commercial and multi-family construction under development in the last two years, which represents 4 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 C. Gershon Company, followed by Hakimian Organization and then Naftali Group.
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 Naftali Group and filed by Michael Witek with plans filed February 8, 2024 and permitted August 19, 2024.

The majority, or 31 percent of the 328,176 square feet of built space are elevator buildings, with specialty buildings next occupying 29 percent of the space.

The borrower

The PincusCo database currently indicates that Naftali Group owned at least 12 commercial properties with 870 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 $1.6 billion in debt, with top three lenders as Bank Hapoalim, Bank OZK, and HSBC Bank 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.

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