Reuben Brothers files to convert upper rooms in Surrey Hotel to 14 residential units

Trevor Stahelski as a representative of property owner Reuben Brothers submitted a major alteration application for a conversion of upper floor hotel (R-1) units in the Surrey Hotel building at 20 East 76th Street in Lenox Hill, Manhattan. The plan was filed with the New York City Department of Buildings on October 20, 2022 under job number M08010233. It call for a conversion of units on the 11th to 15th floors of the 15-story building. The project is described in the filing as: interior alteration of existing hotel and conversion of floors 11-15 and penthouse to R-2 residential use.

Reuben Brothers, which sometimes use the name Motcomb Estates, bought the building in December 2020 for $150.2 million from the Kaufman Organization.

The New York Post reported in 2021 that Reuben Brothers would convert some units to residential apartments, at the time reporting 12 “luxury residences.”

The property

The 20 East 76th Street parcel has frontage of 98 feet and is 102 feet deep with a total lot size of 10,025 square feet. The zoning is C5-1 which allows for up to 4 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The property is in the Upper East Side Historic District. The city-designated market value for the property in 2022 is $59.7 million.

Prior sales and revenue

The hotel building in Lenox Hill has 135,582 square feet of built space according to a PincusCo analysis of city data. The property is owned by Motcomb Estates.

Violations and lawsuits

According to city public data, the property has received four DOB violations, $10,000 in ECB penalties, and $10,600 in OATH penalties in the last year.

The property was involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $45 million commercial foreclosure concerning a loan filed on October 5, 2020, by Surrey Hotel ground lease against None.

The neighborhood

In Lenox Hill, the bulk, or 35 percent of the 51.9 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 28 percent of the space. In sales, Lenox Hill has the highest sale turnover among other neighborhoods in the city with $3.3 billion in sales volume in the last two years. For development, Lenox Hill has near average amount of major developments among other neighborhoods and is the 13th highest in Manhattan. It had 1.7 million square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of seven of the 35 commercial properties representing 181,836 square feet of the 566,445 square feet. The largest owner is Motcomb Estates, followed by Liu Yun Chen and then Dasha Zhukova. There are no active new building construction projects on this tax block.

The owner

The PincusCo database currently indicates that Motcomb Estates owned at least two commercial properties in New York City with 163,436 square feet and a city-determined market value of $113.1 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 83 percent of the 163,436 square feet of built space are hotel properties, with retail properties next occupying 17 percent of the space. They are all located in Manhattan.

The owners according to the Department of Housing Preservation and Development includes Brooke Barrett, head officer and Benjamin Denihan Jr, officer. The business entity is 20 East 76th Street Co., Llc.

The surrounding

Within a 400-foot radius of 28 East 76 Street, Pincusco identified eight commercial real estate items of interests occurred over the past 24 months. Of those eight items, four were sales above $5 million totaling $73 million. The most recent of the four was Embankment Properties LLC which bought two condo units in the 4,088-square-foot, 10-unit mixed-use building (RM) on 3 East 75th Street and one other property for $18.8 million from Segalot, Philippe on October 13, 2022. Of those eight items, four were loans above $5 million totaling $268.5 million. The most recent of the four was Volney Residences cooperative which borrowed $5 million from First Republic Bank secured by one condo unit in the 74,072-square-foot, 85-unit mixed-use building (RM) on 23 East 74th Street on October 18, 2022.

Direct link to the property’s ACRIS page and link to DOB NOW portal.