Namdar, Empire Capital pay $107.6M to Silverstein for office in Grand Central

Namdar Realty Group and Empire Capital Holdings through the entity Empire 529 Fifth LLC paid $107.6 million to Silverstein Properties through the entity 529 Fifth Company Holdings LLC for the office building (O6) at 529 Fifth Avenue in Grand Central, Manhattan.
The buyers financed the purchase with a $71.5 million loan from Deutsche Bank.
The deal closed on June 22, 2023 and was recorded on June 26, 2023. The property has 271,266 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $396 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 Silverstein Properties was Michael Levy. The signatories for Namdar Realty Group and Empire Capital Holdings were Matthew K. Scheriff and Abraham Khalili.
Namdar Realty Group and Empire Capital Holdings boughth the property in a tenants-in-common structure, with Namdar holding 95 percent through Fifth City Realty LLC and Empire holding 5 percent through Empire 529 Fifth LLC.

Larry Silverstein bought the building in May 1978 from Bankers Trust Company for $1.1 million. The Commercial Observer first reported on the deal, noting that Adam Spies, Doug Harmon, Josh King, Adam Doneger, Marcella Fasulo and Avery Silverstein of Newmark brokered the sale.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Namdar Realty Group purchased 13 properties in 10 transactions for a total of $164.2 million and has no record it sold any properties over the past 24 months.
The seller Silverstein Properties purchased four properties in two transactions for a total of $287.2 million and sold eight properties in three transactions for a total of $951.4 million over the same time period.

The property

The office building in Grand Central has 271,266 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 96 feet and is 150 feet deep with a total lot size of 14,524 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 $77.8 million. The most recent loan totaled $122 million and was provided by JPMorgan Chase on October 9, 2020.

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 not received any significant violations in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on October 8, 2015. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Grand Central, The majority, or 83 percent of the 43.5 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 3.3 times the average sales volume among other neighborhoods with $1.2 billion in sales volume in the last two years and is the 11th highest in Manhattan. For development, Grand Central has 2.6 times the average amount of major developments relative to other neighborhoods and is the 14th highest in Manhattan. It had 2.7 million square feet of commercial and multi-family construction under development in the last two years, which represents 6 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of three of the nine commercial properties representing 1,554,921 square feet of the 2,259,037 square feet. The largest owner is Silverstein Properties, followed by Savanna and then Milstein Properties.
There are no active new building construction projects on this tax block.

The majority, or 94 percent of the 2.3 million square feet of built space are office buildings, with hotel buildings next occupying 3 percent of the space.

The seller

The PincusCo database currently indicates that Silverstein Properties owned at least 10 commercial properties with 1,337 residential units in New York City with 13,254,255 square feet and a city-determined market value of $4.6 billion. (Market value is typically about 50% of actual value.) The portfolio has $3.7 billion in debt, with top three lenders as New York Liberty Development Corporation, Wells Fargo, and Bank of New York Mellon as trustee respectively. Within the portfolio, the bulk, or 90 percent of the 13,254,255 square feet of built space are office properties, with elevator properties next occupying 9 percent of the space. They are all located in Manhattan.

The buyer

The PincusCo database currently indicates that Namdar Realty Group owned at least 73 commercial properties with 921 residential units in New York City with 1,553,764 square feet and a city-determined market value of $283.9 million. (Market value is typically about 50% of actual value.) The portfolio has $150.6 million in debt, with top three lenders as Benefit Street Partners, Signature Bank, and Ladder Capital respectively. Within the portfolio, the bulk, or 26 percent of the 1,553,764 square feet of built space are walkup properties, with office properties next occupying 24 percent of the space. The bulk, or 68 percent of the built space, is in Manhattan, with Bronx next at 18 percent of the space.
The PincusCo database currently indicates that Empire Capital Holdings owned at least four commercial properties in New York City with 683,274 square feet and a city-determined market value of $247.4 million. (Market value is typically about 50% of actual value.) The portfolio has $30.6 million in debt, borrowed from Thorofare Capital and Hakimian Partners. Within the portfolio, the bulk, or 95 percent of the 683,274 square feet of built space are office properties, with hotel properties next occupying 4 percent of the space. The bulk, or 96 percent of the built space, is in Manhattan, with Brooklyn next at 4 percent of the space.

Direct link to Acris document. link