J.P. Morgan Provides Zucker Org $24M To Refinance UES Retail Condo
The two-story ground floor retail space is currently leased to Equinox
By Brian Pascus August 6, 2024 2:03 pm
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The Zucker Organization has secured $24 million to refinance the retail condominium portion of 30 East 85th Street, a 35,000-square-foot luxury condominium on the Upper East Side, Commercial Observer has learned.
J.P. Morgan provided the 10-year loan through the bank’s commercial mortgage-backed securities (CMBS) platform, while Avison Young’s tri-state debt and equity finance team led by Scott Singer, Kevin Swartz, Jeffrey Moroch and Andrew McNulty arranged the financing.
Singer, principal, and co-lead of Avison Young’s tri-state debt & equity finance team, noted that the 37-year-old property is fully leased and expects it to remain “a stable and successful asset for many years to come.” He also pointed to the strength of the CMBS market to deliver financing in a market starved for liquidity and financing today.
“In late Spring 2024, many balance sheet lenders were shying away from non-grocery retail. CMBS stepped up, as it was created to do, to fill a capital vacuum and we were able to generate strong competition from a variety of CMBS originators,” Singer said in a statement.
In an interview with CO Tuesday, Singer expounded on how the deal came together, as the Zucker Organization sought fixed-rate financing.
“We’re in a period of time where many balance sheet lenders, insurance company lenders, are focused on grocery-anchored suburban property for retail loans, so that created an opening for the CMBS market,” he said. “And we had significant competition among CMBS lenders for the transaction.”
Daniel Lederman, executive vice president of Zucker, noted in prepared remarks that this deal was the first time his firm had worked with Avison Young, who he praised for “thoughtful guidance and proactive support throughout the process.”
“Our ability to refinance the retail condominium at 30 East 85th Street is a validation of the
enduring quality of both the asset and the neighborhood,” said Lederman. “We also appreciate J.P. Morgan for its ability to secure and close on the CMBS loan.”
The Zucker Organization developed 30 East 85th — a 75 unit, 30-story condo off Madison Avenue — in 1987.
Located one block away from Central Park and the Metropolitan Museum of Art, the building has attracted high-class clientele to its condos. Billionaire Robert Toll of Toll Brothers listed his penthouse condo in April 2022 for $22 million.
“We’re bullish on New York City and we’re bullish on retail in the city,” said Singer. “Madison Avenue in the [East] 80s has been a strong location for decades. It has all the cache of a Madison Avenue address, but rents in the 80s have always been significantly lower than in the [East] 60s — so the retail uses are well suited to the neighborhood.”
A two-story retail portion resides at the base of the building; currently an E by Equinox leases the second floor. Other ground-floor retail tenants include Starbucks, James Perse, and the sales office of a nearby condo, according to Singer, who called them, “a terrific bunch of tenants.”
Brian Pascus can be reached at bpascus@commercialobserver.com.
