Major Developments:
Owners of the retail condos at 697 Fifth Avenue, 647 Fifth Avenue and 205 East 59th Street are suing the city’s Department of Finance, claiming its tax assessments are too high. The anchor tenants at all of these buildings have either ended or renegotiated leases since 2022.The Real Estate Board of New York has proposed increasing average wages and benefits paid to construction workers on projects receiving a new version of the 421a property tax program. Leaders of the Building and Construction Trades Council rejected the offer.
The Department of Environmental Protection is going after 2,400 “chronically delinquent” accounts that owe $102 million. DEP said owners have 15 days to either pay off their entire bills or enter a payment plan with the city. Otherwise, their water could be shut off.
The head of Cohen Brothers Realty, through a number of different entities, defaulted on $534 million in debt tied to seven properties: a Florida design center, Westchester redevelopment site, New York office tower, Fort Lauderdale hotel and three theaters in as many states. Cohen Brothers is now late on at least $966 million in debt.
Blackstone obtained a $308.5 million refinancing for 65 East 55th Street. The financing replaces a $425 million CMBS loan from 2019.
Maguire Capital Group, Madison Realty Capital and Newbond Holdings bought a $81.5 million distressed senior loan from Santander Bank and City National Bank of Florida Deal for the Fifth Avenue Hotel. The hotel owners were reportedly in the market to sell a stake in the hotel.
Taconic Partners and Nuveen Real Estate have offered new details in the office property they are eyeing at the corner of Grand and Varick streets in Manhattan, a 28-story, 431,000-square-foot development. One Grand, which includes a ground-floor public school and retail offerings and office space starting 100 feet above. The project will not start until an anchor tenant is in place.
The landlord of 530-542 West 27th Street alleges the production is violating city administrative code by operating without a public assembly permit, which covers safety concerns such as fire prevention and seating arrangements.
A complaint filed alleges the TMPL Gym at 355 West 49th Street, where rent is $137,000 a month, has lost 500 members as a result of the poor building condition. Caused by suing SL Green for $30 million for allegedly allowing sewage to leak into his Midtown gym.
The parent company of Property Building Corp is seeking to buy its debt on 10 Bryant from JPMorgan. Discount Investment Corp plans to issue corporate bonds in Israel to raise at least $400 million to buy and then pay off its debt on the 30-story tower. The building’s outstanding debt, including the senior and mezzanine loan, totals $385 million. The tower is 94% leased. Its anchor tenant, HSBC, will vacate its lease next year.
Lightstone Group refinanced a pair of New York City properties increasing the combined debt at the buildings to $346 million. Lightstone refinanced the Moxy Chelsea hotel at 105 West 28th Street for $177.8 million.
Rybak Development filed plans to demolish the property at 218 Madison Avenue and build a multifamily project.
Assessed values for commercial properties continue to rise, despite plummeting market values and growing signs of distress on the ground. Assessments for office buildings, in particular, were up 3.5% this year over last, driven primarily by trophy and premium space. The rest of the office sector is struggling as companies shrink their office footprints with employees often working from home.
RFR Realty’s office building at 90 Fifth Avenue is headed to special servicing; the 140,000-square-foot property has been plagued in recent years by rising vacancy and declining cash flow. Cash flow fell last year by 8% to $5.9 million. Vacancies are on the rise at the 11-story building, where half of the space is available immediately.
