Are developers playing "chicken" with the market?

David Goldsmith

All Powerful Moderator
Staff member
Another project wrapping construction but hasn't launched sales yet.

 

David Goldsmith

All Powerful Moderator
Staff member
CIM, LIVWRK look to sell Dumbo rentals for $235M
Developers behind an amenity-packed residential project in Dumbo are looking to sell its rental portion for $235 million — the biggest offering of its kind so far this year in Brooklyn.
CIM Group and LIVWRK have put the 320-unit rental portion of their Front & York project on the market, according to an offering memo for the property.

The block of rentals is part of the 1.1 million-square-foot building at 85 Jay Street designed by architect Morris Adjmi. The development also includes 131,000 square feet of retail and 408 condominiums, which are not part of the offering.

But fitting with the luxury condo motif, the building is packed with high-end amenities that could be described as extravagant, even by the standards of one of Brooklyn’s most expensive neighborhoods.
The building includes more than 77,000 square feet of amenities including a luxury gym across three levels, a Kid’s Academy, a full-service salon and spa, a health-oriented cafe and the neighborhood’s largest indoor pool, according to the marketing memo.

The sellers are aiming for a price around $235 million, or about $374,000 per unit.
A spokesperson for CIM Group could not be reached for comment and a representative for LIVWRK declined to comment. The project is being marketed by Cushman & Wakefield’s Adam Spies and Doug Harmon, who declined to comment.
The developers topped out construction in September and the building is expected to get its temporary certificate of occupancy in the second quarter.

CIM and LIVWRK purchased the site, a former parking lot, for $345 million in 2016 with Kushner Companies from the Jehovah’s Witnesses. At the time, the investors were buying other properties in the neighborhood from the religious group that they renovated and leased as office space.
Kushner sold its stake to CIM and LIVWRK in 2018.

The condo portion’s projected sellout of $833 million made the project Brooklyn’s most expensive filing of 2019. The offering memo for the rental portion of the building said a new buyer could consider converting the rental units to for-sale condos.
 

David Goldsmith

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Mezz lender purchases 10 units at Gramercy condo​

Units sold for nearly $19M​

Mountbatten Equities has sold 10 units at its Gramercy Park condominium, Rutherford Place, to an entity that identifies itself as its mezzanine lender.
The buyer, a limited liability company called 305 Second Avenue Mezz Lender, bought the units for $18.64 million in early March, property records show. Alexander Zabik, the managing director and credit portfolio manager of private equity firm Pennybacker Capital, signed the deed for the LLC.

The deal works out to roughly $1.86 million per unit. Mountbatten is marketing the remaining apartments with Compass for between $825,000 to $3.195 million. It’s unclear how many units the developer still owns.

There’s been increasing interest in bulk condo buys among institutional investors, but completed transactions have been few and far between as many developers balk at the deep discounts would-be buyers are seeking.
The largest bulk deal to date is Elad Group’s $90 million sale of 70 units at its Hell’s Kitchen condo to Tishman Realty. Those units traded at a 40.5 percent discount compared to ones that are already in contract. Other deals have been done for less, such as GID Development’s $27 million sale of eight units at Waterline Square to a South American family. The developer reportedly gave the buyer a 7 percent discount.

Bulk sales, and even wholesale offerings shopped around by brokers, are typically kept quiet due to the widespread interpretation of such deals as symptomatic of deeper challenges for the developer and the project. Wholesale deals can also represent settlements among developers and investors, as was the case when the nation of Senegal shelled out $25 million to the developer of its Midtown tower last year, or in the case of Magnum Real Estate’s $33 million sale of 10 units to one its investors in 2019.

Neither Mountbatten nor Pennybacker responded to requests for comment, so the circumstances of this deal are unclear.
But Rutherford Place is not your average condo with lingering unsold units. The building is steeped in New York and celebrity history, and its sales effort has been ongoing for decades.
The 10-story building at 305 Second Avenue was built in 1902 by banker J.P. Morgan to be the city’s largest maternity hospital. It eventually became a general hospital and then, in the 1960s, a drug treatment center.

Mountbatten’s owners, Winthrop Chamberlin and Barnet Liberman, bought the building from Beth Israel Medical Center in the 1980s for $5.5 million and converted it into residential condos. But notably, the developers, who were also behind the Printing House condo conversion in West Village, didn’t make a concerted effort to sell any of its approximately 127 units for more than two decades.

Instead, the developers rented out most of the units to claim a variety of tax benefits, according to building records and an interview Liberman did with the New York Times. Over the years, the building became known for its star-studded rent roll, with former tenants that include comedian Dave Chappelle, producer Benny Medina, rapper and producers Sean “Diddy” Combs, and actors Penn Badgley, Wesley Snipes, Judd Nelson, Chris Farley, and Tom Cruise and his then-wife Mimi Rogers, per New York Magazine.

Mountbatten’s first concerted push to sell its units was in 2006 and then again in 2013, according to media reports at the time.
 

David Goldsmith

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The art of the (discounted) deal​

Rechler and Silverstein have been bargain shopping but opportunities in NYC remain scarce​

One of the biggest investment-sale bargains in New York since the beginning of the pandemic happened just last month. That’s when Scott Rechler’s RXR Realty acquired a 42 percent stake in hundreds of Manhattan rental units from Gary Barnett’s Extell Development. RXR valued the two buildings at $800 million, a 20 percent discount from their pre-Covid valuation of $1 billion.
But while the pandemic has emptied out New York offices and strained landlords, renters and homeowners, it hasn’t unleashed the flood of distress selling experts predicted early on. That’s in large part because banks have offered extensions to loan borrowers and government action has prevented mass foreclosures.
And Rechler said he’s now seeing “a tremendous amount of pent-up demand” in the market.
Sellers have also been reluctant to slash prices because they know investors have billions in dry powder.
“There is a ton of capital on the sidelines and sometimes too much capital creates a self-fulfilling prophecy of modest distress,” said Richard Mack, CEO of Mack Real Estate Group, a major investor and mezzanine lender on development projects.
There is certainly some stress, but lots of the rescue jobs are happening behind the scenes, in the form of debt and equity placements as opposed to outright sales.
“The biggest news is the activity [which] the market won’t readily see because it’s in the capital stack,” said Jay Neveloff, who chairs the real estate group at New York-based law firm Kramer Levin. “You will not see it, it will be under the kimono.”

Alternative lenders are also looking to find ways to either foreclose on defaulted properties or bring on new management to take over struggling projects.
CIM Group and Mack Real Estate — via their lending divisions — have sought to take over properties in default through a Uniform Commercial Code foreclosure, a process that bypasses state courts.
CIM did just that in February, when it foreclosed on the junior mezzanine positions tied to four of HFZ Capital Group’s Manhattan condo conversion projects. The move gave it control of prime development properties on which CIM claims it was owed about $90 million.
Mack could also take control of half of a Brooklyn luxury rental project, The Denizen, from troubled developer All Year Management through a UCC foreclosure. Silverstein Properties made a bid to pay $200 million for the other half of that project, which would be a substantial discount. All Year, led by Yoel Goldman, had valued that portion of the complex at $313 million pre-pandemic, according to an appraisal report on the Tel Aviv Stock Exchange.
In another project involving HFZ, hedge fund Children’s Investment Fund has sought to bring on Zeckendorf Development and Suffolk Construction to take control of the XI, a $2 billion hotel and condo project in Chelsea. Children’s had initially provided HFZ with a $1.25 billion loan to complete the Bjarke Ingels-designed development. In January Children’s filed suit, alleging HFZ was on the hook for at least $160 million in outstanding interest payments.

Holding on​

Owners who can are choosing to hold onto their properties until the market stabilizes and pricing becomes more clear, according to Jonathan Adelsberg, a partner in the real estate group at New York law firm Herrick Feinstein.
At that point, they can “assess the level of damage” the pandemic has had, Adelsberg added.
Estimates are that Covid will lead to $146 billion in pending and existing commercial real estate distressed debt, according to an end-of-year report from Real Capital Analytics.
“The bank accommodations are holding everything together,” said Lisa Knee, tax partner and co-leader of accounting firm EisnerAmper’s national real estate practice. But when banks start marking down their loans, more distress sales are likely to occur.
The current wait-and-see strategy is a slight departure from what followed the Great Recession.
RXR — which Rechler formed in 2007 — made a name for itself by buying massive commercial buildings in New York as the economy was just rising from the depths. In 2011, it acquired the 2.3 million-square-foot Starrett-Lehigh Building in West Chelsea for $900 million.
Two years later, RXR partnered with Walton Street Capital to buy a 1.2 million-square-foot 237 Park Avenue from Lehman Brothers Holdings paying $810 million. The Midtown office building was appraised at $1.3 billion in 2017, according to Trepp, which tracks mortgage-backed securities.
Today, some firms are looking to put money to work as a form of rescue capital, including in the struggling hospitality sector. Last month, Acore Capital said it had already raised $1 billion for its hotel fund to provide financing to hotel borrowers who are no longer being offered extensions with their lenders through preferred equity or mezzanine financing across the United States.
But Michael May, president of Silverstein’s real estate lending arm, said that injecting equity into troubled projects will not always help solve the problem.
“More often than not, unfortunately, the reason that the project is in the situation [it is] in is because the ownership is dysfunctional,” he said.
 

David Goldsmith

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Staff member
I think it's interesting to note that while all we are hearing about is how booming the market is (especially in Brooklyn), this type of move has historically been a sign of distress (especially given how widely acknowledged it is that the rental market is still way down and not seeing any strong signs of returning). I remember when DeMatteis built Tribeca Tower as condominiums, struggled with sales, eventually got foreclosed on, and we bid against Related for the property.
Shifting gears: Brooklyn condo tower to debut as rental

Avery Hall changes strategy on One Boerum Place​

Avery Hall Investments had hoped to launch sales months ago at its Downtown Brooklyn condominium project.
But the developer, citing the sluggish luxury condo market, is changing the 122-unit, $250-million development to a luxury rental complex. Its lenders and partners are on board with the switch.

“We felt the right move for us and our investors and partners was to [create] a rental portfolio,” Avi Fisher, a founding partner of the company, told Bloomberg News, “because we believe it will stand the test of time.”

The 22-story One Boerum Place will come on the market later this year. The handful of one-bedroom units will start in the low $4,000s a month and two-bedroom units will be offered for just under $6,000. Monthly rents for a 1,200-square-foot three-bedroom will be $8,500 and a 3,120-square-foot four-bedroom will ask $12,000 a month, according to the developer.

Renters will enjoy luxury amenities such as a lap swimming pool, two-story gym, yoga room, children’s playroom, communal roof with outdoor kitchen and automated on-site parking.
One Boerum Place could face stiff competition in the luxury rental market if other developers make the same switch. Others may wait to see if One Boerum Place succeeds.

Meanwhile, Brooklyn’s luxury condo market — defined as the top 10 percent of the market — has recovered from a low point in the second and third quarters of 2020. Douglas Elliman reported that 343 sales closed in the first quarter of 2021, up 25 percent from the same period last year.
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
I think it's interesting to note that while all we are hearing about is how booming the market is (especially in Brooklyn), this type of move has historically been a sign of distress (especially given how widely acknowledged it is that the rental market is still way down and not seeing any strong signs of returning). I remember when DeMatteis built Tribeca Tower as condominiums, struggled with sales, eventually got foreclosed on, and we bid against Related for the property.
Shifting gears: Brooklyn condo tower to debut as rental

Avery Hall changes strategy on One Boerum Place​

Avery Hall Investments had hoped to launch sales months ago at its Downtown Brooklyn condominium project.
But the developer, citing the sluggish luxury condo market, is changing the 122-unit, $250-million development to a luxury rental complex. Its lenders and partners are on board with the switch.

“We felt the right move for us and our investors and partners was to [create] a rental portfolio,” Avi Fisher, a founding partner of the company, told Bloomberg News, “because we believe it will stand the test of time.”

The 22-story One Boerum Place will come on the market later this year. The handful of one-bedroom units will start in the low $4,000s a month and two-bedroom units will be offered for just under $6,000. Monthly rents for a 1,200-square-foot three-bedroom will be $8,500 and a 3,120-square-foot four-bedroom will ask $12,000 a month, according to the developer.

Renters will enjoy luxury amenities such as a lap swimming pool, two-story gym, yoga room, children’s playroom, communal roof with outdoor kitchen and automated on-site parking.
One Boerum Place could face stiff competition in the luxury rental market if other developers make the same switch. Others may wait to see if One Boerum Place succeeds.

Meanwhile, Brooklyn’s luxury condo market — defined as the top 10 percent of the market — has recovered from a low point in the second and third quarters of 2020. Douglas Elliman reported that 343 sales closed in the first quarter of 2021, up 25 percent from the same period last year.
John and I already started to talk about "Peak Demand" last week given where all the charts are and where we have come from. Interesting to see this, thanks for sharing. The next few weeks/months will be very telling on where we go from here
 

David Goldsmith

All Powerful Moderator
Staff member
You lose some, you win some.
Ryan Serhant’s brokerage takes over sales at Brooklyn Bridge Park condo

Serhant replaces Douglas Elliman, which marketed the development for years​

Last Saturday, hundreds of guests gathered on Brooklyn Bridge Park’s Pier 6 for an event hosted by celebrity broker Ryan Serhant. The outdoor festivities culminated in more than 36 lights illuminating Quay Tower, the condo building that sits adjacent to the pier.
The flashy message was intended to make a point: Douglas Elliman was out, and Serhant was in.
Serhant’s upstart brokerage has replaced Elliman as the sales and marketing team for Quay Tower, developed by RAL Companies and Oliver’s Realty Group. The event on Saturday documented on Serhant’s personal and professional Instagram accounts, was intended to drum up social media interest in the property.
Robert Levine, RAL’s chairman and CEO, is not a big Instagram guy — he joked that he’s often the “dinosaur in the room” — but still notices the impact that social media can have on a building’s sales.
“It’s not that we were dead in the sand. We were moving along,” Levine said. “But you know, from our perspective and RAL’s perspective, coming out of Covid, it’s a new time and we wanted a change.”
“We started to evaluate: What is marketing, and what is brokerage today? The more we looked at it, the more we felt Ryan was it,” he added. “His personality, his energy, just the excitement he brings to a project is something we appreciate.”
An Elliman spokesperson said that the firm “wish[es] the new sales team the best of luck.”
Hours before Saturday’s event, Serhant posted a promotional video of him driving a boat across the water as a drone chased him overhead. It was a way to highlight a new amenity being offered at the building: Access to One 15 Brooklyn Marina, which has boats available to residents at preferred pricing.

Serhant’s team also encouraged the developers to offer an incentive of a reduced fixed monthly payment for the next two years. There’s also complimentary car services for residents, prospective buyers and brokers to and from Manhattan.
The condominium is the last of the new developments to be built on Brooklyn Bridge Park as outlined by the state’s general project plan for the green space. It’s previously faced legal trouble: In 2016, members of the Brooklyn Heights Association sued the developers, the state and the Brooklyn Bridge Park Corporation, alleging that the building violated that plan. The lawsuit claimed that revenue from the Pier 6 housing — Quay Tower, and a below-market-rate rental building — was not necessary to help the continued funding of the park, as stipulated by the plan. A judge tossed the suit in 2018.

Sales launched in 2018 but only about a third of the building has sold, according to Levine, with about 80 units available. Those range from a two-bedroom asking $1.75 million to a four-bedroom penthouse going for $7.5 million. It has notched one high-profile deal: a penthouse sold for $20.3 million in 2019, which was the most expensive home ever sold in Brooklyn at the time.
Early signs suggest the new strategies could be working: Serhant said his team spent Sunday doing showings for 12 hours straight.
“[Serhant’s approach] is truly getting the message out,” Levine said.
 

David Goldsmith

All Powerful Moderator
Staff member
Number of New Dev contracts in Fidi in the last 3 months aside from 130 William St = 2.

FiDi condo glut is through the roof​

Available apartments have proliferated since offices became optional​

Since Covid rendered walkable commutes a bygone amenity, the Financial District’s condo supply has surged. And there are still few buyers in sight.
The downtown district now holds the most unsold inventory of any New York City neighborhood, with 1,433 new condos available, many of them yet to be listed, according to data by Marketproof reported by Bloomberg News.

The appeal of the area, said Marketproof founder Kael Goodman, was its proximity to downtown offices. But with available office space in lower Manhattan at a 20-year high and only 16% of office employees back at work as of April, Bloomberg reported, buyers are not basing purchase decisions on proximity to work.
As a result, condo units in the area are selling at hefty discounts. According to Bloomberg, Trinity Place Holdings, which developed Jolie at 77 Greenwich Street, slashed prices and is offering up to $175,000 in closing credits to buyers who work at downtown firms, although a spokesperson for Serhant, which is marketing the apartments, denied that. The most expensive sales in the area — penthouses in Silverstein Properties’ 30 Park Place — sold at million-dollar discounts, Bloomberg found.

Developers facing lackluster sales might even choose to reshape their projects. Stephen Kliegerman, president of Brown Harris Stevens development marketing, sees the possibility of corporate apartments, pieds-à-terre and Monday-through-Thursday residences replacing condos.
 

TMalloy

New member
Interesting comment on "Great timing" for the Quay tower (presumably meaning that the new brokers took over as demand is surging). I noticed that work on the two biggest towers in the River Park development (which is just up the street at Atlantic and Hicks, https://riverparkbrooklyn.com/) seems to have completely stopped for the past ~6 months or so. I guess Fortis or their lenders feel differently about the state of things.
 

David Goldsmith

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Staff member

Closing time: HFZ vacates the XI sales gallery in Chelsea​

Elaborate gallery at 25 Little West 12th Street has been packed up, demolished​

Little West 12th Street is down another tenant. Embattled developer HFZ Capital Group has moved out of its gallery space in West Chelsea.
Though the signage touting the developer’s luxury condominium, the XI, still hangs off the storefront, the interior has been emptied of all its furnishings and artwork, The Real Deal observed on a recent visit.

The gallery space had been elaborately renovated by HFZ to hold three art installations with its raison d’être being to sell $2 billion worth of luxury condominiums at HFZ’s nearby project, The XI. The unfinished building, designed by architect Bjarke Ingles, contains 236 units spread between two twisting towers.

HFZ won an award from magazine Interior Design for the finished space. One of the installations, dubbed “Egg,” was a 30-foot long model of Manhattan that was attached to a mirrored ceiling in the gallery.

It was designed by artist Es Devlin, who is known for creating large, site-specific sculptures and installations for designers, performances and major events such as the closing ceremony of the London 2012 Olympic Games. Devlin has designed sets for celebrities including Adele, Kanye West, Jay-Z and Miley Cyrus.
Architectural model builder Kennedy Fabrications partnered with Devlin to create “Egg.” In mid-March, the builder told its Instagram followers that the sculpture was being dismantled. On Thursday, Kennedy posted a timelapse video showing the sculpture being taken apart one piece at a time.

“Just strolled by yesterday trying to get another peak at it! Too late tho,” one follower commented. “Too late indeed,” another replied.
The gallery owner, Greenway Mews Realty, is preparing the space for a new tenant, according to a contractor who spoke on the condition of anonymity.
“They’re going to demo everything and they’re going to rent the space out,” said a contractor, who recently did work on the property. The person confirmed that all the art was gone, apart from the fountain, which is now empty.

The relationship between the tenant and landlord wasn’t always smooth.
Last August, Greenway sued HFZ claiming the developer did not vacate the space when its three-year lease expired in June. The dispute was settled later that month when HFZ extended its lease through March 2021. The monthly rent had been $152,235, according to court documents.

What the empty space means for HFZ, which did not respond to requests for comment, or its sales efforts at the XI going forward is unclear.
Sales have been slow at the project for years, but the project’s future is uncertain amid HFZ’s mounting financial and legal troubles.
In January, the Zeckendorf brothers were considering taking over the project. Then HFZ’s lender at the XI alleged that the developer failed to pay interest required on loans of $655 million and $100 million between April and November last year, triggering a default. The Children’s Investment Fund, a hedge fund, provided HFZ with a $1.25 billion loan on the project in 2017.

To date, less than 20 percent of the condos at the XI have been sold, according to property records. A recent analysis of contracts at the project by data firm Marketproof shows 39 units valued at $286 million have found buyers.
One of the buyers reportedly includes New Zealand’s wealthiest man, billionaire Graeme Hart. He signed a contract for a $34 million penthouse in 2019.

Douglas Elliman Development Marketing, which also declined to comment, is still handling sales for the project.
It’s the second time in recent months that HFZ has vacated a property it has intricately designed. Last month, Ashkenazy Acquisition took over the developer’s swanky 13,000-square-foot office at 600 Madison Avenue.
 

David Goldsmith

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Starwood takes control of 21 units at HFZ’s Chatsworth​

Lender is suing the developer for defaulting on its loan​

HFZ Capital’s portfolio of high-end New York City apartments is slowly eroding.
Ziel Feldman’s development firm has transferred 21 co-ops at the Chatsworth, its Upper West Side co-op conversion, to its lender, an affiliate of Starwood Capital. The deal was first reported by PincusCo and hit city records in early May.
Starwood did not return a request for comment.

The sale comes after a Starwood entity sued HFZ for $157 million in October. The lender alleges that HFZ, Feldman and his wife, Helene, defaulted on the senior and mezzanine loans, an unsecured loan and an inventory loan for the century-old building at 344 West 72nd Street.

The suit alleges there was an August forbearance agreement between HFZ and Starwood, in which the developer agreed to make payments totaling $9.1 million between Aug. 17 and Oct. 28. Starwood alleges HFZ missed those scheduled payments. The suit is still pending, according to court records.

In an answer to the amended complaint, HFZ’s lawyers denied Starwood’s allegations. Neither Ziel nor Helene Feldman returned requests for comment for this story.
HFZ bought the Chatsworth in 2013 for $150 million and quickly sought to convert the 147-unit Beaux-Arts rental building into co-ops. In 2017, HFZ sold 46 of the building’s rent-stabilized units to an entity linked to the Safra family for $38 million.

The once-prolific HFZ has turned over a number of its properties in recent months. Earlier this year, Los Angeles-based CIM Group, one of HFZ’s lenders, last month foreclosed on the junior mezzanine positions tied to four properties: 88 and 90 Lexington Avenue; The Astor at 235 West 75th Street; and Fifty Third and Eighth at 301 West 53rd Street.

In December, Monroe Capital, one of the firm’s lenders, foreclosed on HFZ’s stake in a national industrial portfolio. A month later, Westbrook, its partner on the Belnord condo conversion in Manhattan, told The Real Deal that the developer’s “only remaining connection to the project is that it holds a minority non-controlling residual economic interest.”
 

David Goldsmith

All Powerful Moderator
Staff member

Cayuga Capital selling Williamsburg assemblage for $65M​

New office, retail building never materialized on Wythe Avenue​

A Williamsburg assemblage once slated for an office and retail development is on the market for $65 million, The Real Deal has learned.
The parcel at 87 Wythe Avenue is a combination of a 37,000-square-foot renovated retail space and 22,400 square feet of vacant land, which could give way to a 53,000-square-foot building.

It was assembled several years ago by Cayuga Capital Group, led by Jacob Sacks and James Wiseman. The developers acquired three lots to create the block-long parcel on Wythe Avenue between 10th and 11th streets.

One of the sites was Vice Media’s former North 11th Street headquarters. In 2015, the developer paid $14.5 million to acquired the final piece, a warehouse at 85 Wythe Avenue.
Cayuga then filed plans to build a nine-story office and retail building, but it never materialized. The developer is now on the hook for a $28.5 million mortgage backed by the parcel, according to property records. M&T Bank is the lender.

Cayuga and M&T did not immediately respond to requests for comment.
The parcel is being marketed by a team from B6 Real Estate Advisors, led by Paul Massey and Bryan Kirk. According to the brokers, the retail section has 12 commercial units and is 80 percent occupied. Kirk declined to comment on the property owner.

The site is located in a particularly busy section of Williamsburg, with hotels, new office space and plenty of retail nearby. The Williamsburg Hotel, which is currently going through restructuring under a Chapter 11 bankruptcy petition, is just across the street, and the Hoxton, Wythe and William Vale hotels are all a short walk from the site. Rubenstein Partners and Heritage Equity Partners’ 25 Kent Avenue, another large office property, is a few blocks away.
 

David Goldsmith

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With $52M sale to Texas rug maker, plan for oligarchs’ tower unravels​

Sale of 260 Fifth Avenue ends dream of massive resi project​

One man’s dream of a Fifth Avenue tower for Russian oligarchs has died.
Boris Kuzinez has sold his 60,000-square-foot office building at 260 Fifth Avenue for $52.5 million, according to property records. The Manhattan building was one of three assembled by the Israeli-Russian billionaire who struggled to find a lender for his resi tower.
Therein lies the rug.
The buyer is Texas-based rug manufacturer Amir Loloi, who scooped up the NoMad office building for $6.5 million less than what Kuzinez paid for it in 2016. Commercial Observer first reported the sale.
Kuzinez was on a buying spree then, amassing 260, 262 and 264 Fifth Avenue for $101.8 million. Demolition permits for 262 Fifth were approved by the city in 2017 and the property was razed but little has happened since.

Kuzinez’s vision was for a 928-foot-tall condominium tower with just 39 apartments. It would have stood across the street from Marble Collegiate Church, where a proposed office tower recently succumbed to financial woes at embattled developer HFZ.
Kuzinez did not return a request for comment sent to a representative at EBK Development.

The developer oversaw the transformation of Ostozhenka Street in Moscow into the city’s “Golden Mile,” an equivalent of New York City’s Billionaire’s Row, where oligarchs live in ostentatious, western-style residential palaces.
The ground-floor showroom of 260 Fifth is occupied by discount fashion retailer 260 Sample Sale. A company representative said she was unaware of any plans to move its showroom, but that it had relocated its offices across the street to 261 Fifth Avenue.

Loloi, who did not respond to a request for comment, would be at home at 260 Fifth Avenue, just north of Madison Square Park. The small district of NoMad is home to more than 15 rug sellers — likely the highest concentration in the city.
Michael Ferrara of Brax Realty represented the seller, and Andrew Zang and Greg Albert of Savills represented the buyer.
 

David Goldsmith

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Michael Stern-owned condo project files for Chapter 11 bankruptcy​

Stern’s LLC owns majority interest in Park Slope project​

Developer Michael Stern’s JDS Fourth Avenue LLC, which owns a majority interest in a Park Slope, Brooklyn condo project, has filed for Chapter 11 bankruptcy protection in Delaware.
The company has a 51 percent stake in the Park Slope condo project at 613 Baltic Street, according to bankruptcy documents filed Tuesday. That property is the subject of a legal battle between JDS Development and Staten Island-based construction company Tona Construction & Management.
Previously, the construction company alleged that the developer ignored their partnership agreement to build the 43-unit condo building at 613 Baltic Avenue. In doing so, Stern withheld financial information on the project and instead used JDS’ own construction arm at inflated rates, the 2018 lawsuit claims.

The project has since been completed. The lawsuit was moved to bankruptcy court, given the filing.
Now, in the bankruptcy filing, the construction company’s litigation claim is included among the list of creditors who have unsecured claims. Others are FTI Consulting, which has a claim of $178,922, and law firm Kasowitz Benson Torres LLP, with a claim of $309,292.

Though Tona Construction was seeking at least $65.8 million in damages in its lawsuit against the company, the unsecured claim amount is listed as unknown.
Stern declined to comment.
 

David Goldsmith

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This week's New Development Report from Sotheby's Kevin Brown Team.

NB
Week of May 9 to May 15
Contracts signed 63, sales volume $246,930,769

Week of May 30 to June 5
Contracts signed 29, sales volume $76,051,970
 

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