Namdar, Mason Asset Management acquire Midtown East office through ground lease valued at $14.6M

Namdar Realty Group and Mason Asset Management through the entity 587 Fifth Nassim LLC acquired control of the office building at 587 Fifth Avenue in Midtown East, Manhattan from the Infinity Collective’s 587 B Fifth Ave LLC. The transaction was the acquisition of the ground lease, and the city valued the transaction at $14.6 million for tax purposes.
The deal closed on January 18, 2023 and was recorded on January 30, 2023. The property has 33,922 square feet of built space and 3,562 square feet of additional air rights for a total buildable of 37,500 square feet according to PincusCo analysis of city data. The sale price per built square foot is $429 and the price per buildable square foot is $388 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 fee is owned by Solil Management also known as the estate of Sol Goldman. The Infinity Collective was marketing the ground lease through the brokerage B6 Real Estate Advisors for $36 million in 2021. However, the sale was not brokered by B6, according to a person familiar with the transaction.

The buyer Mason Asset Management, according to its website, was founded in 2010 and is, “an owner/operator of retail assets nationally and currently has a national portfolio of more than 120 shopping centers, including 45 regional malls, totaling more than 30 million square feet.” Elliot Nassim is president of Mason Asset Management.

Namdar, according to its website, is a, “privately held, commercial real estate investment firm, owning and managing over 57 million square feet of commercial real estate throughout the United States. Founded in 1999…”

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 Infinity Collective had not purchased any other properties and sold two properties in two transactions for a total of $22.9 million over the same time period. The 33,922-square-foot property generated revenue of $4.1 million or $122 per square foot, according to the most recent income and expense figures.

The property

The 587 Fifth Avenue parcel has frontage of 30 feet and is 125 feet deep with a total lot size of 3,750 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 $14.6 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property since September of 2020. In addition, according to city public data, the property has received one DOB violation and $2,250 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on April 24, 2013. There are no active new building construction projects or major alteration projects with initial costs more than $5 million on this tax lot.

The neighborhood

In Midtown East, the majority, or 81 percent of the 61.6 million square feet of commercial built space are office buildings, with hotel buildings next occupying 7 percent of the space. In sales, Midtown East has the 2nd highest sale turnover among other neighborhoods in the city with $3.4 billion in sales volume in the last two years. For development, Midtown East is the most active neighborhood among other neighborhoods. It had 15.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 24 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 nine of the 21 commercial properties representing 1,986,754 square feet of the 2,309,122 square feet. The largest owner is 54 Madison Partners, followed by Stawski Partners and then Solil Management.
On the tax block, there were two new building construction projects totaling 1,978,755 square feet. The largest is a N/A-unit, 1,862,831-square-foot B building developed by Devin Maher with plans filed June 26, 2019 and permitted November 30, 2021. The second largest is a 161-unit, 115,924-square-foot R-1 building developed by Tom Christopoul with plans filed June 1, 2016 and permitted August 23, 2017.

The majority, or 82 percent of the 2.2 million square feet of built space are office buildings, with retail buildings next occupying 9 percent of the space.

The buyer

The PincusCo database currently indicates that Namdar Realty Group owned at least 61 commercial properties in New York City with 1,417,831 square feet and a city-determined market value of $229.3 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 25 percent of the 1,417,831 square feet of built space are elevator properties, with office properties next occupying 24 percent of the space. The bulk, or 71 percent of the built space, is in Manhattan, with Bronx next at 16 percent of the space.

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