Raven Capital buys $40M note secured by REEC’s new office building in East Harlem

Raven Capital Management through the entity 22261l, LLC bought a note with an original principal of $40 million from Related Companies secured by Real Estate Equities Corporation’s newly built office building (O6) at 2226 Third Avenue in East Harlem, Manhattan.
The deal closed on July 1, 2025 and was recorded on July 8, 2025. The prior lender was Related Companies which held debt that had an original loan amount of $40 million.The property has 133,426 square feet of built space and 56,349 square feet of additional air rights for a total buildable of 189,730 square feet according to a PincusCo analysis of city data.
Nightingale Properties had signed a contract to buy the property, but it’s unclear if that was finalized.

A managing partner of of Real Estate Equities Corporation (REEC) died by apparent suicide last summer. Nightingale Properties’ former CEO Elchonon Schwartz was charged in February by the U.S. Securities and Exchange Commission with defrauding investors of $62.8 million. He pleaded guilty to one count of wire fraud, was sentenced to 87 months and ordered to pay restitution.

Raven Capital did not respond to a request for comment.

Prior sales and revenue

The 133,426-square-foot property generated revenue of $7.4 million or $56 per square foot, according to the most recent income and expense figures.

The property

The office building in East Harlem has 133,426 square feet of built space and 56,349 square feet of additional air rights for a total buildable of 189,730 square feet according to a PincusCo analysis of city data. The parcel has frontage of 126 feet and is 150 feet deep with a total lot size of 18,973 square feet. The lot is irregular. The zoning is C4-6 which allows for up to 3.4 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 $36.3 million. The most recent loan totaled $40 million and was provided by Related Companies on October 26, 2021.

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 $6,070 in OATH penalties in the last year.

Development

On the lot, there is one active new building construction project, 121209156, for a 134,306 square-foot B building. The project was submitted by Real Estate Equities Corporation and filed by Brandon Klein with plans filed December 24, 2020 and permitted September 16, 2021.

The neighborhood

In East Harlem, The majority, or 51 percent of the 52.4 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 21 percent of the space. In sales, East Harlem has 1.9 times the average sales volume among other neighborhoods with $508.2 million in sales volume in the last two years and is the 21st highest in Manhattan. For development, East Harlem has 1.8 times the average amount of major developments relative to other neighborhoods and is the 20th highest in Manhattan. It had 2.1 million 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. 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 eight of the 22 commercial properties representing 549,776 square feet of the 624,767 square feet. The largest owner is L+M Development Partners, followed by Renaissance Realty Group and then Babad Management.
On the tax block, there were two new building construction projects totaling 145,993 square feet. The largest is a 134,306 square-foot business (B) building submitted by Real Estate Equities Corporation and filed by Brandon Klein with plans filed December 24, 2020 and permitted September 16, 2021. The second largest is a 15-unit, 11,687 square-foot residential (R-2) building submitted by Joseph Atarien with plans filed June 17, 2019 and permitted June 14, 2022.

The majority, or 81 percent of the 624,767 square feet of built space are elevator buildings, with mixed-use buildings next occupying 7 percent of the space.

The borrower

The PincusCo database currently indicates that Real Estate Equities Corporation owned at least 10 commercial properties in New York City with 43,803 square feet and a city-determined market value of $21.9 million. (Market value is typically about 50% of actual value.) The portfolio has $178.5 million in debt, with top three lenders as Parkview Financial, Raven Capital Management, and Heritage Capital Management respectively. Within the portfolio, the bulk, or 100 percent of the 43,803 square feet of built space are mixed-use properties, with development properties next occupying 0 percent of the space. They are all located in Manhattan.
The PincusCo database currently indicates that Nightingale Properties owned at least three commercial properties in New York City with 59,757 square feet and a city-determined market value of $15.4 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 100 percent of the 59,757 square feet of built space are office properties, with specialty properties next occupying 0 percent of the space. They are all located in Manhattan.

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