William Kaufman Organization signs $155M refi with Signature for office building in Midtown East

The William Kaufman Organization through the entity 7 Third Avenue Leasehold LLC as borrower signed a refi loan with lender Signature Bank valued at $155 million for the office building (O4) at 777 Third Avenue in Midtown East, Manhattan.
The deal closed on November 18, 2022 and was recorded on December 1, 2022. The prior lender was Transamerica Life Insurance Company which held debt that had an original loan amount of $140 million. The property has 563,420 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $275 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 owner bought the property on October 31, 2014, for $3.5 million. The signatory for William Kaufman Organization was Jonathan Iger. The signatory for Signature Bank was Michael Riegler.

Prior sales and revenue

The 563,420-square-foot property generated revenue of $39 million or $69 per square foot, according to the most recent income and expense figures.

The property

The 777 3rd Avenue parcel has frontage of 200 feet and is 145 feet deep with a total lot size of 26,900 square feet. The lot is irregular. The zoning is C6-6 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 $139 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 $19,990 in ECB penalties and $20,590 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 Midtown East, the majority, or 82 percent of the 61.5 million square feet of commercial built space are office buildings, with hotel buildings next occupying 7 percent of the space. In sales, Midtown East has the 2nd highest sale turnover among other neighborhoods in the city with $3.3 billion in sales volume in the last two years. For development, Midtown East is the most active neighborhood among other neighborhoods. It had 15.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 24 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of one of the 19 commercial properties representing 3,712 square feet of the 655,354 square feet. The identified owner is Ricky Hiang.
There are no active new building construction projects on this tax block.

The majority, or 92 percent of the 629,828 square feet of built space are office buildings, with retail buildings next occupying 2 percent of the space.

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