A&R Kalimian Eyes Sale of 310-unit Aire Apartments in Lincoln Square

A&R Kalimian Realty, the owner of Aire Apartments in Manhattan's Lincoln Square, is actively considering the sale of the 310-unit property. Despite a robust 97 percent occupancy rate as of last September, financial hurdles have emerged, primarily tied to a defaulted $193.8 million CMBS loan.

Financial Struggles Triggered by Maturing Loan

The property grapples with the aftermath of a $193.8 million CMBS loan that defaulted in November upon maturity. The loan, which had been amortizing on a 30-year schedule, paid a 4.833 percent coupon. Unfortunately, the Aire Apartments' cash flow, amounting to $9.19 million through September last year, falls approximately 14 percent short of servicing the matured loan. The financial strain traces back to 2016 when the property ceased to generate sufficient cash flow to service the loan.

Loan Composition and Additional Financial Complexities

The defaulted loan is divided between two CMBS deals: $116.3 million in JPMorgan Chase Commercial Mortgage Securities Corp., 2013-C16, and the remaining $77.5 million in JPMBB Commercial Mortgage Securities Trust, 2013-C17. Additionally, the Aire Apartments is burdened with $25 million in mezzanine financing, which also matured in November. The property's financial complications are exacerbated by the expiration of a tax abatement that significantly reduced its tax bill from $1.1 million to the current annual payment of $6.6 million.

Historical Context and Acquisition Details

Kalimian Realty acquired the Aire Apartments site from the Red Cross in 2004 for $72.3 million, unveiling the property in 2013. Despite these challenges, the company owns a substantial portfolio, comprising 10 commercial and multifamily properties in Manhattan, including notable addresses such as 79 Fifth Ave. and 150 Amsterdam Ave., as per regulatory filings. The potential sale of Aire Apartments marks a strategic move for Kalimian Realty amidst the evolving landscape of Manhattan's real estate.