03/09/2011

UBS Shops Defaulted Loan on NY Condo Site

UBS is shopping a defaulted $30.5 million loan on a Manhattan site slated for the development of a luxury condominium building.

The 5,000-square-foot parcel, at 276-280 Third Avenue in the Gramercy Park section, could support a 105,000-sf building.

The owner, developers Norman Kaish and Leonard Taub, started assembling land and air rights along the southwest corner of East 22nd Street in 2006. The UBS loan backs the 5,000-sf parcel, but Kaish and Taub also control 2,800 sf of adjacent land.

Their plan for the 7,800 sf of parcels called for the development of a 20-story tower, with 144,000 sf. The building would have had 110 luxury condos and about 5,000 sf of street-level retail space. But their firm, Kaish & Taub Development of New York, defaulted on the UBS loan last year.

Now the bank is moving to foreclose. It has scheduled a foreclosure auction on March 30 and has hired Jones Lang LaSalle to round up third-party bidders. While lenders often schedule such auctions as a formality to take control of the collateral, in this case the property could end up in the hands of an outside party. That's because the loan might command bids of about $300 per buildable sf, or $31.5 million. At that price, which would exceed the loan balance, UBS presumably would be willing to take the money and let the winning bidder take over the site.

It's unclear how many units the 5,000-sf parcel would accommodate. But a buyer might be able to strike a deal with Kaish & Taub to also build on the adjacent land.

Under its plan for the 7,800-sf site, Kaish & Taub estimated that the project would cost about $105 million and that the sales of condos and the retail space would produce about $145 million. The tower would have featured a green-glass facade and luxury amenities, including a gym and a pool. Units would have contained 1-3 bedrooms.

The owner of a three-story structure on a parcel not collateralizing the UBS loan had refused to sell to Kaish & Taub. As a result, the firm's design called for the condo tower to surround the building, which has a bar on the ground floor and apartments above. It sits near the center of the side of the tower that would have faced Third Avenue.

Back Print