RFR Holding pays Nuveen $291M for office in Grand Central

RFR Holding through the entity 475 Fifth Holding LLC acquired an interest from Nuveen through the entity T-C 475 Fifth Avenue Venture LLC valued at $291M for the office building at 475 Fifth Avenue in Grand Central, Manhattan.
RFR Holding through the entity T-C 475 Fifth Avenue LLC as borrower signed an acquisition loan with lender Citibank valued at $180 million for the office building at 475 5th Avenue in Grand Central, Manhattan. The Commercial Observer reported debt at $260 million with JPMorgan Chase and Citibank as senior lenders and PCCP as a mezzanine lender. RFR borrowed through the entity Nuveen had formerly owned the building under.
The deal closed on May 19, 2022 and was recorded on May 24, 2022. The property has 220,413 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $1,320 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.)
Commercial Observer reported RFR’s acquisition of the property and that the brokers were Darcy Stacom, Doug Middleton and Alana Bassen of CBRE. This was an entity level transfer, not a deed transfer.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer RFR Holding purchased nine properties in one transactions for a total of $350 million.
The 220,413-square-foot property generated revenue of $25.3 million or $115 per square foot, according to the most recent income and expense figures.

The property

The 475 5th Avenue parcel has frontage of 104 feet and is 140 feet deep with a total lot size of 14,675 square feet. The lot is irregular. 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 $114.2 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 $500 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 $5 million on this tax lot.

The neighborhood

In Grand Central, the majority, or 74 percent of the 47.4 million square feet of commercial built space are office buildings, with residential elevator buildings next occupying 11 percent of the space. In sales, Grand Central has the highest sale turnover among other neighborhoods in the city with $2.4 billion in sales volume in the last two years. For development, Grand Central has had very little major development activity relative to other neighborhoods.It had 557,614 square feet of commercial and multi-family construction under development in the last two years, which represents 1 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of five of the 19 commercial properties representing 1,248,156 square feet of the 2,731,781 square feet. The largest owner is SL Green Realty, followed by Vanbarton Group and then DiamondRock Hospitality Company. There are no active new building construction projects on this tax block.

The majority, or 94 percent of the 2.7 million square feet of built space are office buildings, with hotel buildings next occupying 5 percent of the space.

The buyer

The PincusCo database currently indicates that RFR Holding owned at least seven commercial properties with 1,717,706 square feet and a city-determined market value of $788.2 million. (Market value is typically about 50% of actual value.) The portfolio has $748 million in debt, with top three lenders as Credit Suisse, Citibank, and AllianceBernstein respectively. Within the portfolio, the bulk, or 87 percent of the 1,717,706 square feet of built space are office properties, with hotel properties next occupying 11 percent of the space. They are all located in Manhattan.

Surrounding

Within a 400-foot radius of 475 5th Avenue, PincusCo identified four commercial real estate items of interests occurred over the past 24 months.
Of those four items, three were sales above $5 million totaling $78.7 million. The most recent of the three was Piyush Golia which bought the 13,836-square-foot office building (O6) on 8 East 41st Street for $12.4 million from Meir Levy on March 29, 2022.
One of those four items was a loan which Piyush Golia borrowed $6.8 million from Lakeland Bank secured by the 13,836-square-foot office building (O6) on 8 East 41st Street on March 29, 2022.

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