Watch dealer Avi Hiaeve pays $26.7M for former Playboy Club building in foreclosure

Luxury watch dealer Avi Hiaeve through the entity 5 East 59th Street Holdings LLC paid $26.7 million for the office building (O6) at 5 East 59th Street in Lenox Hill, Manhattan, formerly owned by BentallGreenOak. It was the former location of the Playboy Club, which closed in 1986.

Avi Hiaeve bought the property in a foreclosure auction on January 17, 2024.

The sale closed on February 28, 2024 and was recorded on February 29, 2024. The property has 38,052 square feet of built space and 12,145 square feet of additional air rights for a total buildable of 50,190 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $701 and the price per buildable square foot is $531 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.)

Avi Hiaeve is CEO of Avi & Co., a watch seller with locations in the Diamond District on 47th Street, and in Miami.

The acquisition was financed with an $18.2 million loan from Cerco Funding.
The seller bought the property on June 19, 2015, for $85 million. The signatory for BentallGreenOak was Jeffrey Miller. The signatory for Avi Hiaeve was Avi Hiaeve. The contract date was January 17, 2024. BentallGreenOak lost the property in a foreclosure auction after lender United Overseas Bank filed to foreclose on the property in 2021, 850266/2021 The sale was ordered by a ruling in February 2023 to held within a year.

In 2015, BentallGreekOak, at the time just GreenOak, partnered with Daniel Ghadamian and Josh Zamir’s Capstone Equities to pay $85 million for the former Playboy Club location, a 9-story building that includes 45,796 square feet of space, composed of 35,211 square feet of office and 10,585 square feet of retail. To finance the purchase, United Overseas Bank lent the owners $59.15 million. That loan matured June 18, 2021, and the owners were not able to refinance, and several months later the bank filed the pre-foreclosure action.

The property is entirely vacant, according to court records.

“Smart move for this watch retailer,” said retail broker Joseph Aquino of JAACRES. “He’s two blocks from 57th and 5th which is now the epicenter of the world with LVMH about to build a new world headquarters, a newly designed Tiffany’s, all adjacent to Prada, Bulgari and Trump Tower. Related is about to build a luxury hotel with condo apartments at 625 Madison Avenue which is down the street. And let’s not forget he’s facing The Plaza and Apple.”

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Avi Hiaeve had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller BentallGreenOak purchased one property in one transaction for a total of $20.4 million and sold or turned over seven properties in three transactions for a total of $202.3 million over the same time period.

The property

The office building in Lenox Hill has 38,052 square feet of built space and 12,145 square feet of additional air rights for a total buildable of 50,190 square feet according to a PincusCo analysis of city data. The parcel has frontage of 50 feet and is 100 feet deep with a total lot size of 5,019 square feet. The zoning is C5-2.5 which allows for up to 12 times floor area ratio (FAR) for commercial. The city-designated market value for the property in 2022 is $14.3 million.

The neighborhood

In Lenox Hill, The bulk, or 35 percent of the 52 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 $4 billion in sales volume in the last two years. For development, Lenox Hill is the 9th most active neighborhood among other neighborhoods. It had 4.5 million square feet of commercial and multi-family construction under development in the last two years, which represents 9 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of nine of the 10 commercial properties representing 1,049,947 square feet of the 1,202,696 square feet. The largest owner is Titan Golden Capital, followed by L&L Holding and then Highgate.
There are no active new building construction projects on this tax block.

The majority, or 95 percent of the 1.2 million square feet of built space are office buildings, with hotel buildings next occupying 4 percent of the space.

The seller

The PincusCo database currently indicates that Bentallgreenoak owned at least eight commercial properties with 858 residential units in New York City with 2,260,545 square feet and a city-determined market value of $761.9 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 56 percent of the 2,260,545 square feet of built space are office properties, with elevator properties next occupying 40 percent of the space. The bulk, or 96 percent of the built space, is in Manhattan, with Brooklyn next at 4 percent of the space.

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