Murray Hill Multifamily Transfers to Special Servicing

A Murray Hill multifamily building is heading to special servicing.

A borrower connected to CBSK Ironstate failed to pay off a $44 million balance on its loan by its March maturity date. The loan is backed by The Frontier, a 91-unit rental building at 200 East 39th Street.

The 19-story building, located just off Third Avenue, was developed by the CBSK Ironstate in 2013.

CBSK Ironstate is a partnership of Charles Blaichman of CB Developers, SK Development’s father-and-son team Abe and Scott Shnay, and the Ironstate Properties brothers Michael and David Barry.

The partnership is listed as the loan’s sponsor. An entity called CB Frontier LLC entered a 75-year lease on the lot in 2012 for $14 million, according to city records. At that time, the space was vacant.

CBSK Ironstate developed the property and in 2016 took out a $48.25 million refinancing loan. That loan was then securitized and sold to developers. The property was valued at $71 million.

Since then, expenses have increased more than 40 percent, according to Morningstar Credit. They jumped from $1.7 million at underwriting to about $2.5 million in 2024.

Revenue hasn’t made that same jump, meaning that the amount of money available to pay off debt service has also fallen. Operating income now no longer fully covers debt service payments. The building has a debt service coverage ratio of 0.97.

George Cahn, a spokesperson with Cahn PR speaking on behalf of the developer, said the developer is in the process of refinancing the loan.

“There are no issues,” Cahn said via email. “They are just finalizing the terms.”

CBSK is involved in other residential properties in the city, including the condop project at 1228 Madison Avenue, the condo project at 591 Third Avenue called the Lindley, and the office building at 363 Lafayette Street.