Developer Scores Major Construction Loan For Big UES Project: Report

UPPER EAST SIDE, NY — A huge 33-story development under construction on East 77th Street just got a just-as-large cash infusion.

Naftali Group, the major developer behind the project at 255 East 77th Street, on the corner of Second Avenue, just secured a $236 million construction loan for their nearly 500-foot-tall development, according to The Real Deal.

The CEO of the global property developer, Miki Naftali, told the real estate news site in a statement that the firm has "the confidence of our lenders," despite the current "extremely challenging” condo market in the city.

Those lenders include both JP Morgan, who provided the lion's share of the loan with $195 million of debt, and Starwood, who loaned $41 million.

Naftali purchased the lots for the project in 2021 for just under $73 million and has since demolished three buildings, two of which contained 63 apartments, at the site.

In the lead up to the purchase, one tenant, Vero Wine Bar, filed suit against its then-landlord at 1483 Second Ave., alleging that he made violent threats in an effort to drive them out in order to sell the building.

At first, Naftali filed plans last fall for a 535-foot-tall tower with only 55 units, which would have made the development both the tallest tower north of 72nd Street and a net loss of housing units on that corner.

Naftali has since revised their development, according to updated plans filed in September.

Now the tower is a bit shorter — at 481 feet including the mechanical bulkhead, making it no longer a contender for the tallest building above 72nd Street — and it will contain seven more condos, for a total of 62, reducing the net loss of housing to only one unit.

But a shorter tower and more units doesn't mean the notoriously luxurious developer is building little boxes. The average unit size will still roughly be over 3,000 square feet.

The tower will also include 22 enclosed parking spots.

The company's other projects include The Benson, a 21-story tower on Madison Avenue; another 39-story tower at 200 East 83rd St.; and a planned 18-story building on the Upper West Side being stymied by a holdout tenant.