Katan Group and Partners Buy 345 Seventh Avenue for $85M

After a period of distress, 345 Seventh Avenue has new owners who will likely convert the Penn District office tower into residential.

The Katan Group, Mike Kohan of Kohan Retail Investment Group and real estate investor Ilya Mikhailov purchased the 25-story building between West 29th and West 30th Streets that was in Uniform Commercial Code (UCC) foreclosure starting in July for about $85 million, the buyers announced Wednesday.

“This is the right time to invest in New York City,” Isaac Katan of the Katan Group said in a statement. “This acquisition reflects our strong belief in New York City’s remarkable potential for a comeback and its bright future. We are inspired by the current administration’s visionary approach to new zoning, brought to life through exceptional planning by the office of City Planning and the great support of the City Council.”

The building was formerly owned by Igal Namdar’s Namdar Realty Group and Empire Capital Holdings, which paid $107 million for it, as well as two other nearby buildings, in 2021 with a $78 million floating-rate mortgage from Benefit Street Partners.

Namdar did not immediately respond to a request for comment.

The Great Neck, N.Y.-based Namdar made a name for itself by buying distressed malls around the country at bargain prices, cutting costs and limiting capital improvements to turn a profit.

Namdar hoped to bring that strategy to New York City’s struggling office market buying up 345 Seventh and 830 Third Avenue.

“The prices of these office buildings have dropped so much that it’s hard to not make money,” Namdar told Bloomberg TV in June. 

In early July, Namdar and Empire were negotiating with Benefit Street to hand over the keys ahead of its loan maturing in September after occupancy dropped from 59 percent when Namdar bought it to 43 percent in September 2023, as Commercial Observer previously reported. But within days the building was headed for auction.

However, while plans haven’t been filed yet, Katan said he is taking a different tactic and wants to convert the property from offices to housing.

“The current proposed zoning changes to the neighborhood, aimed at bringing thousands of residential units to the area surrounding the magnificently transformed Penn Station, present an especially promising opportunity to create something impactful for the community,” Katan said.

It’s unclear if the property was purchased out of auction or through a direct deal with the former owners or lenders.

Mark Hallum can be reached at mhallum@commercialobserver.com.