What HFZ Lost to CIM in Foreclosure of 4 NYC Condos

HFZ lost control of four conversion condominiums, ceding the buildings to mezzanine lender CIM Group, according to a report by The Real Deal.

Marketproof Pro data reveals precisely what HFZ lost to CIM Group in the foreclosure auction: 148 units, hardly any cheaper than $1 million, many of them more than $3 million, and some exceeding $15 million.

CIM Group is a Los Angeles developer and private equity firm. It regularly takes over struggling projects and attempts to reposition them. The company famously transformed the Drake Hotel into the ultra-luxury 432 Park Avenue. CIM also developed Dumbo’s Front and York and Crown Heights’ 111 Montgomery.

HFZ handed over Fifty Third and Eighth in Midtown, The Astor in the Upper West Side, and Nomad’s 88 and 90 Lexington. Marketproof reviewed data unavailable in any one other place on the Web to break down the losses.

Fifty Third and Eighth

Fifty Third and Eighth, located at 301 West 53rd, was renovated in 2015. The condo is home to units that are priced at $972,000–3.46m.

The nine listed units are mostly two-bedrooms that the building is offering for $1.475-3.1m. The PPSF hovers around $1,700. Asking prices mostly represent a dip from past sales prices.

The sponsors are holding 21 conversion units. Here, the statistics mostly reflect those of listed options. The PPSF for these 1–3-bedroom apartments varies between $1,434–2,000.

Use Marketproof Pro for NYC property data, ownership records, and market analytics.

The Astor

In HFZ’s foreclosure, CIM picked up some pricier assets at the Upper West Side’s The Astor. The West 75th St building’s average PPSF is $2,261.

Many of its unsold units are three- and four-bedrooms with price tags in the $4-7 million range. Three penthouses top out at $10.6, $13.0, and $15.75 million. This building also accounts for 55 of the 148 total units involved in the deal. The building only has 102 units total.

It is fair to wonder whether the luxury-adverse market of the past few years, which COVID exacerbated, contributed to difficulties offloading these apartments.

88 and 90 Lexington

The adjacent 88 and 90 Lexington in Nomad are 18 and 13 floors, respectively, with 85 and 53 units. 88 was renovated in 2017, 90 in 2018.

In the HFZ foreclosure, CIM acquired 45 units at 88 Lex. The seven listed apartments, mostly three- and four-bedrooms, vary from $3.2–6.2 million. The shadow inventory encompasses a broader range from a studio being sold for less than $1 million to two penthouses priced at $9 million or more.

The building contains 45 unsold units. Like The Astor, then, more than half its units appear to be unsold. Also similar to The Astor, its price points are mostly at odds with the trends of the current market.

CIM appears to be taking on eighteen of 90 Lex’s 53 units. The prices vary from $1.5-4.5 million with plenty of one-, two-, and three-bedrooms available. The average PPSF for the entire building is $1,976.

The upshot

Following HFZ’s foreclosure, CIM is taking over 148 units, the vast majority of which it will surely try to sell for more than $1 million, many much more than that. The past few years, punctuated by the progressive mansion tax and COVID, have been tough for high-end condo developers. Foreign investors have fled the market, and buyers have zeroed in on Brooklyn’s cheaper digs.

But it’s unclear whether HFZ’s foreclosure is an isolated incident or portends tough years to come for Manhattan developers.

The photo above is courtesy of 90 Lexington Avenue