Zeckendorf signs $136.6M refi for Hayworth in Carnegie Hill

Zeckendorf Development through the entity 86Lex Owner LLC as borrower signed a refi loan with lender JPMorgan Chase valued at $136.6 million for the former Ceruzzi Properties condo project the Hayworth, at 1289 Lexington Avenue in Carnegie Hill, Manhattan.
The deal closed on March 9, 2022 and was recorded on April 7, 2022. The prior lender was Children’s Investment Fund which held senior debt that had an original loan amount of $138 million.
The signatory for Zeckendorf Development was Arthur W. Zeckendorf, III. The signatory for JPMorgan Chase was Simon Burce.

Violations and lawsuits

The properties were involved in two lawsuits and zero bankruptcies over the past two years. The highest value suit was a $40 million money judgment concerning a loan filed on March 30, 2021, by Children’s Investment Fund and Talos Capital against Ceruzzi Properties. In addition, according to city public data, the properties have not received any significant violations in the last year.

Development

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.

The block

On the tax block of 155 East 86th Street, PincusCo has identified the owners of four of the 21 commercial properties representing 132,276 square feet of the 528,773 square feet. The largest owner is Zeckendorf Development, followed by Pan Am Equities and then 171 East 86 Street LLC.

The majority, or 82 percent of the 611,613 square feet of built space are residential elevator buildings, with retail buildings next occupying 9 percent of the 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.

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