Namdar, Klosed buy $30M note secured by Nightingale Properties office building in Grand Central

Namdar Realty Group and Klosed Properties through the entity 20 E 46 Lender LLC bought a note with an original principal of $30 million from East West Bank secured by Nightingale Properties’s office building (O6) at 20 East 46th Street in Grand Central, Manhattan. Nightingale controls the property through a ground lease. The fee owner is Solil Management.
The deal closed on August 11, 2023 and was recorded on September 6, 2023. The prior lender was East West Bank which held debt that had an original loan amount of $30 million.

The property has 87,016 square feet of built space according to a PincusCo analysis of city data.
The signatory for Nightingale Properties was Elie Schwartz. The Real Deal reported on the note sale last week. Rosewood Realty Group’s Alex Fuchs and Ben Khakshoor brokered the note sale. Nightingale bought the ground lease from Extell Development in May 2016 for $27.675 million. The original ground lease was signed in 1957. Solil Management, the ground landlord, bought the fee position in January 1982. The Real Deal reported there were 27 years remaining on the ground lease.

The property

The office building in Grand Central has 87,016 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 60 feet and is 100 feet deep with a total lot size of 6,025 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 $21 million. The most recent loan totaled $18 million and was provided by East West Bank on May 12, 2021.

Violations and lawsuits

The property was involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $27.7 million judgment concerning a ground lease filed on June 15, 2022, by Nightingale Properties, Simon Singer, and Elchonon Schwartz against Solil Management. In addition, according to city public data, the property has received one DOB violation, $3,125 in ECB penalties, and $5,135 in OATH penalties in the last year.

Development

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 2.4 times the average sales volume among other neighborhoods with $868.9 million in sales volume in the last two years and is the 15th highest in Manhattan. For development, Grand Central has 2.6 times the average amount of major developments relative to other neighborhoods and is the 13th 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. There was one pre-foreclosure suit filed among other office buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of six of the 12 commercial properties representing 1,365,147 square feet of the 1,539,951 square feet. The largest owner is R&B Development Group, followed by Pia Investments Ltd. and then Nightingale Properties.
There are no active new building construction projects on this tax block.

The majority, or 58 percent of the 1.5 million square feet of built space are office buildings, with hotel buildings next occupying 41 percent of the space.

The borrower

The PincusCo database currently indicates that Nightingale Properties owned at least six commercial properties in New York City with 1,519,103 square feet and a city-determined market value of $222.6 million. (Market value is typically about 50% of actual value.) The portfolio has $106.9 million in debt, with top three lenders as TPG Real Estate Partners, East West Bank, and Capstone Equities respectively. Within the portfolio, the bulk, or 100 percent of the 1,519,103 square feet of built space are office properties, with specialty properties next occupying 0 percent of the space. The bulk, or 75 percent of the built space, is in Manhattan, with Brooklyn next at 25 percent of the space.

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