Tailored Investment Approach

At CSC Real Estate, we see opportunity in market dislocation, particularly within today’s undervalued office sector. Through basis-driven underwriting, disciplined downside protection, and operational creativity, we convert underutilized office buildings into high-demand residential and mixed-use assets in supply-constrained urban markets.

THE 5-STEP VALUE CREATION MODEL

At CSC Real Estate, we see opportunity in market dislocation, particularly in today’s undervalued office sector.

We convert underutilized office buildings into high-demand residential and mixed-use assets through basis-driven underwriting, downside protection, and operational creativity.

Distressed Sourcing & Note Acquisition

Target underpriced office buildings in core locations with 30-70% vacancy and depressed pricing, typically acquired from lenders or distressed sellers at a 40-75% discount to prior valuations or replacement cost.

consolidate Occupancy

Restructure tenant footprints to consolidate leased space (creating a saleable office condo) while vacating targeted floors for conversion. This approach unlocks full floors for residential use while preserving existing NOI.

Basis Recapitalization  & Structural Unification

Execute early partial asset sales (office condo or leasehold) to the investment. This step often returns 100%+ of equity prior to construction start and transforms the residual risk-return profile.

Convert Vacant Floors

Execute residential or mixed-use conversion of vacant space. Typical hold timeframe: 18–36 months. These assets are eligible for favorable debt and tax treatment (e.g., 467-m tax abatement, leasehold financing).

Minimize Net Equity Exposure

Employ structured finance and recycled capital to complete conversions
with minimal residual equity. Achieve infinite or high-double-digit
cash-on-cash returns post-refi or stabilization

ARCHETYPE I – 75 MAIDEN LANE (NOTE ACQUISITION & PROGRAMMATIC DE-RISKING)
Day Zero De-Risking via Structural Arbitrage
The StructuralPuzzle

A non-performing $43.7M senior note held by a regional bank (Flagstar/NYCB) with an underwater borrower and a fractured deed position.

The “Brain Teaser"Unlock
  • Simultaneous Sourcing: CSC executed a simultaneous Note Buy ($31M) and Deed Purchase ($14M), clearing the title for $45M—a 56% discount to replacement cost.
  • Programmatic Monetization: At the time of closing, CSC signed a binding agreement to sell the Ground/Cellar condo to a non-profit anchor (Life Center Church) for $14M.
Granular Realization
  • Basis Manufacturing: The $14M church sale immediately recoups 31% of the total acquisition cost, dropping the fund s net residential basis to $31M.
  • Leverage Protection: Investors' preferred equity is secured by 262,000 SF of residential rights in the Financial District at a net basis of $118 PSF.
  • The Buffer: With market-ready residential shells in FiDi trading at $400+ PSF, the 12% Pref sits behind a 3.4x collateral-to-basis cushion on Day One
IN DEVELOPMENT
ARCHETYPE II – 136 EAST 57TH ST. (STRUCTURAL JV UNIFICATION)
Capital Stack Engineering – Resolving the “Underwater Leasehold”
The StructuralPuzzle

A bifurcated Fee/Leasehold tower in Midtown East where a $2.5M
fixed ground rent obligation created a $2.0M annual cash-flow deficit,rendering the asset toxic to institutional lenders.

The “Brain Teaser"Unlock
  • Fee-Simple Consolidation: CSC negotiated a "collapse" of the leasehold and fee, paying $10M to terminate the leasehold and unifying the title.
  • Synthetic Equity Conversion: CSC converted the fee owner’s fixed ground rent into a JV preferred equity position. The owner receives their $2.5M distribution only if the asset performs, effectively neutralizing the asset’s “burn.”
Granular Value 
Realization
  • Value Arbitrage: By converting a debt-like liability (rent) into equity (distribution), CSC manufactured $50M in subordinate equity overnight.
  • Leverage Protection: The Fund’s senior refinance of $30M sits against an $80M reset capitalization
  • The Buffer: This restructure creates a conservative 37% senior LTV, providing $2.50 of equity support for every $1.00 of senior capital.
IN DEVELOPMENT
ARCHETYPE III – 300 EAST 42ND ST. (STRATEGIC ASSET BIFURCATION)
Basis Manufacturing through Condo Mapping
& Vertical Separation
The StructuralPuzzle

A prime Grand Central office tower valued at $122.5M in 2019, but
un-financeable as a single asset due to a 38% vacancy rate and
sector-wide office flight.

The “Brain Teaser"Unlock
  • Condo Mapping: CSC structured the asset into three distinct legal parcels: retail, office, and residential.
  • Forward Monetization: CSC identified a forward purchaser for the 30% occupied office component at a $22M valuation, funding $12M at the acquisition closing.
Granular Realization
  • Net Equity Efficiency: The sale of non-core office and retail components recycles the acquisition equity early, allowing the Fund to own the residential conversion floors at an adjusted basis of $191 PSF.
  • The “Infinite Yield Option”: Had liquidity allowed an all-cash close, the same monetization strategy would have reduced the residential basis to just $12 PSF.
  • Leverage Protection: At a basis of $191 PSF for Midtown East residential, the 12% preferred is protected by an entry cost that is 80% below replacement cost.
IN DEVELOPMENT
Investment Strategy CONCLUSION

“We do not bet on cap-rate compression; we manufacture our own alpha on Day One. By solving the ‘brain teaser’ of a deal’s capital structure or legal title, we enter every project on a basis so low that the residential conversion potential is effectively a ‘free call option’ for our investors. This ensures your 12% preferred equity is not just a yield play but a defensive position in prime urban real estate collateralized at land-value basis."