Wharton, Aurora, Adjmi sign $10M loan with NongHyup Bank at renovated office in Grand Central

Jeff Sutton’s Wharton Properties, Bobby Cayre’s Aurora Capital Associates and Alex Adjmi’s ACHS Management, through the entity 511 Fifth Partners LLC as borrower, signed an initial loan with the Korea-based lender NongHyup Bank valued at $10 million for the office building (O6) at 511 5th Avenue in Grand Central, Manhattan.

Sutton, Cayre and Adjmi are ground lease tenants who signed a 99-year ground lease in 2015 with affiliates off Kurt Schimmel, George Feldman Jr. and Norbert Natanson, which the city valued at $174 million for transfer tax purposes.

The building underwent a major rehabilitation that was completed in 2023, the New York Post reported last year.

The loan closed on April 15, 2024 and was recorded on April 18, 2024. The property has 125,632 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $79 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.)
The signatory for the borrowers was Jeff Sutton.

The property

The office building in Grand Central has 125,632 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 62 feet and is 123 feet deep with a total lot size of 7,734 square feet. 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 $37.2 million.

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 four DOB violations, $13,780 in ECB penalties, and $20,670 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 $1 million on this tax lot.

The neighborhood

In Grand Central, The majority, or 83 percent of the 43.5 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 3.2 times the average sales volume among other neighborhoods with $895.5 million in sales volume in the last two years and is the 9th highest in Manhattan. For development, Grand Central has 3.4 times the average amount of major developments relative to other neighborhoods and is the 9th highest in Manhattan. It had 3.9 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. There were four 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 three of the seven commercial properties representing 2,536,768 square feet of the 3,167,811 square feet. The largest owner is SL Green Realty, followed by Munich RE and then Aurora Capital Associates.
On the tax block, there was one new building construction project filed totaling 1,298,506 square feet. It is a 1,298,506 square-foot business (B) building submitted by SL Green Realty and filed by Harry Olsen with plans filed September 1, 2015 and permitted July 31, 2017.

The majority, or 98 percent of the 3.2 million square feet of built space are office buildings, with specialty buildings next occupying 2 percent of the space.

The borrower

The PincusCo database currently indicates that Wharton Properties owned at least 87 commercial properties with 212 residential units in New York City with 3,676,926 square feet and a city-determined market value of $1.9 billion. (Market value is typically about 50% of actual value.) The portfolio has $261.6 million in debt, with top three lenders as Valley National Bank, Bank of China, and Provident Bank respectively. Within the portfolio, the bulk, or 71 percent of the 3,676,926 square feet of built space are office properties, with retail properties next occupying 18 percent of the space. The bulk, or 86 percent of the built space, is in Manhattan, with Brooklyn next at 10 percent of the space.

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