Zeckendorf acquires defaulted Ceruzzi Hayworth condo project valued at $231.8M in Carnegie Hill

Zeckendorf Development through the entity 86lex, LLC acquired an interest from the Children’s Investment Fund through the entity Moo Three LLC valued at $231.8 million for condominium project the Hayworth at 1289 Lexington Avenue, with an alternate address at 155 East 86th Street, in Carnegie Hill, Manhattan.

Ceruzzi filed a new building construction project totaling 203,157 square feet. It was for a 61-unit, 203,157-square-foot residential (R-2) building developed by Ceruzzi with plans filed February 10, 2016 and permitted January 30, 2018.

The Real Deal reported in February that Zeckendorf Development bought the project, which Ceruzzi Properties began assembling many years earlier, or approximately $250 million. Ceruzzi died unexpectedly in 2017 but the firm continued with the development.  The seller entity was previously owned by Ceruzzi Properties and Children’s Investment Fund gained control in a UCC foreclosure. Then Children’s Investment sold the development to Zeckendorf.

On one of the tax lots, there was a condominium project filed with the address 1289 Lexington Avenue and the name Hayworth Condominium on November 2, 2017. The principals of the sponsor, MONTY TWO EAST 86TH STREET ASSOCIATES LLC, were Shang Dai and Arthur Hooper Jr..

The neighborhood

In Carnegie Hill, the majority, or 76 percent of the 38.3 million square feet of commercial built space are residential elevator buildings, with specialty buildings next occupying 9 percent of the space. In sales, Carnegie Hill has 3 times the average sales volume among other neighborhoods with $817.3 million in sales volume in the last two years and is the 14th highest in Manhattan. For development, Carnegie Hill has had very little major development activity relative to other neighborhoods.It had 709,333 square feet of commercial and multi-family construction under development in the last two years, which represents 2 percent of the neighborhood’s built space.

Surrounding

Within a 400-foot radius of 155 East 86th Street, PincusCo identified 12 commercial real estate items of interests occurred over the past 24 months.
Of those 12 items, one was in new building development. It was a new building permit application filed on November 4, 2020 for a 63,888-square-foot R-2 building with 32 residential units at 126 East 86th Street.
Of those 12 items, one was for major renovation including a certificate of occupancy change. It was a permit issued on February 3, 2021 for the $518,500 renovation of 16,295-square-foot R-2 building with 16 residential units at 1276 Lexington Avenue.
Of those 12 items, four were sales above $5 million totaling $69.5 million. The most recent of the four was 171 East 86 Street LLC which bought the 5,000-square-foot, five-unit retail building (K1) on 1530 3rd Avenue for $21 million from Jerrold G. Levy on December 20, 2021.
Of those 12 items, six were loans above $5 million totaling $203.1 million. The most recent of the six was Dimitri N. Kessaris which borrowed $5.6 million from Jovia Financial Federal Credit Union secured by the 5,840-square-foot, two-unit mixed-use building (S1) on 154 East 85th Street on December 29, 2021.

Direct link to Acris document. link