Sapir Organization records $200M refi for two office properties in Grand Central, part of $326M debt package

UPDATED: Sapir Organization through the entity 260-261 Madison Avenue LLC as borrower signed a refi loan with lender JPMorgan Chase valued at $200 million for two office properties including the office building (O4) at 260 Madison Avenue in Grand Central, Manhattan and the office building (O4) at 261 Madison Avenue in Grand Central, Manhattan. The $200 million was recorded in city property records, but the total debt package was $326 million, according to an article in Bloomberg.  The $126 million difference is mezzanine debt provided by Mack Real Estate Group.
The deal closed on December 8, 2022 and was recorded on December 15, 2022. The prior lender was COMM 2012-CCRE3 which held debt that had an original loan amount of $231 million.The two properties have 915,204 square feet of built space according to PincusCo analysis of city data.
The signatory for Sapir Organization was Charles Hillock. The signatory for JPMorgan Chase was Jessica Wong. The prior recorded debt was originated by Cantor Commercial, totaling $231 million in 2012, which was securitized.

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 260 Madison Avenue.

Prior sales and revenue

The two properties with a total of 915,204 square feet of built space generated revenue of $50.1 million per year or $55 per square foot.

The property

The 260 Madison Avenue parcel has frontage of 197 feet and is 147 feet deep with a total lot size of 29,130 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 $124.5 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have received one DOB violation, $1,250 in ECB penalties, and $12,450 in OATH penalties in the last year.

The neighborhood

In Grand Central, the majority, or 80 percent of the 43.9 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 2.8 times the average sales volume among other neighborhoods with $973 million in sales volume in the last two years and is the 15th highest in Manhattan. For development, Grand Central has 1.7 times the average amount of major developments relative to other neighborhoods and is the 16th highest in Manhattan. It had 1.8 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.

The block

On the tax block of 260 Madison Avenue, PincusCo has identified the owners of five of the 32 commercial properties representing 152,476 square feet of the 1,555,489 square feet. The largest owner is McSam Hotel Group, followed by RFR Holding and then Kash Group.
On the tax block, there was one new building construction project filed totaling 66,270 square feet. It is a 162-unit, 66,270-square-foot R-1 building developed by Sam Chang with plans filed December 18, 2015 and permitted August 7, 2017.

The majority, or 85 percent of the 1.5 million square feet of built space are office buildings, with hotel buildings next occupying 13 percent of the space.

Correction: The total debt package is $326 million, not the $200 million which was recorded.

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