Namdar, partners sign $111.2M loan for Fifth Avenue office properties

Namdar Realty Group and partners as borrowers signed a loan with an undisclosed lender in care of the Israeli firm Reznik Paz Nevo Trusts valued at $111.2 million for two office properties, the office building (O6) at 529 Fifth Avenue in Grand Central, and the office building (O6) at 587 Fifth Avenue in Midtown East, Manhattan.

Namdar and Empire Capital Holdings paid Silverstein Properties $107.6 million for 529 Fifth Avenue in June 2023, and Namdar and Mason Asset Management partnered to buy a ground leasehold on 587 Fifth Avenue for $14.6 million in January 2023.
The new loan closed on September 20, 2023 and was recorded on September 27, 2023. The two properties have 305,188 square feet of built space and 3,561 square feet of additional air rights according to a PincusCo analysis of city data. The loan price per built square foot is $364 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 Namdar Realty Group was Igal Namdar. The signatory for Reznik Paz Nevo Trusts was Hillel Lazarus.

According to the Reznik Paz Nevo Trusts website, “The company acts as a trustee for about 250 series of bonds issued to the public and to Israeli institutional investors by both Israeli and foreign companies, as well as for private loans from public companies and institutional and governmental organizations totaling dozens of billions of NIS.”

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 529 5th Avenue.

Prior sales and revenue

Out of the two properties, one with a total of 305,188 square feet of built space generated revenue of $4.1 million per year.

The property

The office building in Grand Central has 305,188 square feet of built space and 3,561 square feet of additional air rights 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 $71.5 million and was provided by Deutsche Bank on June 22, 2023.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties for the past 24 months. In addition, according to city public data, the properties have received three DOB violations, $6,280 in ECB penalties, and $7,280 in OATH penalties in the last year.

Development

For the tax lot buildings, two out of the two buildings received a initial certificate of occupancy in the last ten years. 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 2.5 times the average sales volume among other neighborhoods with $895.8 million in sales volume in the last two years and is the 14th highest in Manhattan. For development, Grand Central has 2.2 times the average amount of major developments relative to other neighborhoods and is the 12th highest in Manhattan. It had 2.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 5 percent of the neighborhood’s built space. There were two pre-foreclosure suit filed among other office buildings in the past 12 months.

The block

On the tax block of 529 5th Avenue, 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 Savanna, followed by Milstein Properties and then Empire Capital Holdings.
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 borrower

The PincusCo database currently indicates that Namdar Realty Group owned at least 74 commercial properties with 921 residential units in New York City with 1,825,030 square feet and a city-determined market value of $361.7 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 35 percent of the 1,825,030 square feet of built space are office properties, with walkup properties next occupying 22 percent of the space. The bulk, or 73 percent of the built space, is in Manhattan, with Bronx next at 15 percent of the space.
The PincusCo database currently indicates that Empire Capital Holdings owned at least five commercial properties in New York City with 954,540 square feet and a city-determined market value of $325.2 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 97 percent of the 954,540 square feet of built space are office properties, with hotel properties next occupying 3 percent of the space. The bulk, or 97 percent of the built space, is in Manhattan, with Brooklyn next at 3 percent of the space.

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