CSC Real Estate Secures $108M Construction Loan for Conversion at 770 Second Avenue

Office-to-residential conversion mania still has a firm hold on Manhattan.

CSC Real Estate, a New York-based investment firm specializing in redevelopment and conversions, has secured a $108 million construction loan for an office-to-residential conversion at 770 Second Avenue in Manhattan’s Murray Hill neighborhood, Commercial Observer has learned. 

The financing was provided by SCALE Lending, the joint lending company of Slate Property Group and the Carlyle Group. The deal was arranged by Morris Betesh, Morris Dabbah and Louis Halperin from Arrow Real Estate Advisors. 

“This transaction reflects continued lender appetite for well-located conversion opportunities in New York City,” Betesh, Arrow’s founder, said in a statement. “CSC has demonstrated a strong ability to execute on complex repositionings, and 770 Second Avenue is well positioned to meet the growing demand for high-quality rental housing in Murray Hill.”

CSC Real Estate acquired 770 Second Avenue — which has an alternative address of 300 East 42nd Street — for $52 million in April 2025 from David Werner, only two months after Werner had acquired the property (for the same price) from the lender, Fortress Investment Group. 

The property is being converted under New York’s 467m program, which provides tax exemptions of up to 35 years when converting nonresidential buildings into rental housing with affordable units.

The project will convert 12 floors of the 18-story property into 140 residential units, 35 of which will be designated as affordable. The building will also feature 11,000 square feet of new amenity space, with construction expected to be completed in the first quarter of 2027. 

“This project exemplifies CSC’s ability to transform underutilized assets into long-term value,” said Alberto Smeke, a principal of CSC Real Estate who runs the company alongside his brother Salo Smeke. “Demand from institutional lenders and investors remains strong, and CSC is well positioned to continue scaling into larger and more sophisticated opportunities.”

News of the construction financing for the conversion comes as property records made public Thursday show a $22 million sale of a commercial condo unit within the building, likely retail or office space that will continue to be used for such purposes. CSC, using the entity 300 East Holdings, sold the condo unit — labeled No. 2 — to an LLC tied to independent investor Moses Mizrahi, who used the entity 300 E 42 U2, records show. A spokesperson for CSC could not provide additional details on the sale or say whether it was related to CSC’s redevelopment of the property. Mizrahi could not be reached for comment.

“Our team is proud to advance the repositioning of 770 Second Avenue and deliver high-quality housing to New York City,” Salo Smeke, a principal of CSC, said in a statement. “Institutional partners rely on CSC because we manage the most challenging projects with precision and accountability. The depth of capital interest we continue to see reflects the confidence the market places in our platform.” 

Amanda Schiavo can be reached at aschiavo@commercialobserver.com.