Two blocks east of Grand Central Terminal, where young Wall Street analysts and Midtown attorneys pack every doorman rental building to the rafters, Hal Fetner and PGIM found a rare chance to buy 170 free-market apartments at a 10 percent discount to 2016 pricing. They wired $76.5 million ($500 per square foot, or $450,000 per apartment) to acquire the 24-story tower at 235 East 40th Street from AvalonBay Communities, locking in a 5.8 percent going-in cap rate. When the deed closed on November 28, 2025, Fetner Properties (Hal Fetner) and PGIM Real Estate Equity had officially taken down 235 East 40th Street from AvalonBay Communities for $76.5 million, with CBRE brokering the trade.

Look past the headline figure and the story is all about the basis reset. The 153,000-square-foot building last traded in February 2016 for $85 million. Stepping in at $500 a square foot—or $450,000 a door across its 170 apartments— shaves 10.0 percent off that prior valuation, giving Fetner Properties (Hal Fetner) and PGIM Real Estate Equity a margin of safety that would have been unthinkable at the top of the cycle. Even better for the buyers, the in-place rent roll hands them a verified 5.80 percent going-in cap rate from day one.

Pacific Life Writes $49.7 Million Fixed for 10 Years

The real tell in any Manhattan closing sits on the debt side of the ledger. To fund the purchase, Fetner Properties (Hal Fetner) and PGIM Real Estate Equity locked in a $49.73 million 10-year fixed life-company multifamily loan from Pacific Life Insurance Company at 65 percent loan-to-value.

That loan commitment meant the buyers only needed to write a $26.77 million equity check to control a 24-story, 1986-vintage Murray Hill / Grand Central asset. Credit committees aren't stretching to 75 percent leverage anymore, but when a sponsor brings $26.77 million of real cash equity and a basis of $500 a square foot, lenders like Pacific Life Insurance Company are wide open for business.

From Our Desk

When we look at 235 East 40th Street on our placement desk at Light Tower Group, the lesson for New York sponsors comes down to the marriage of entry basis and lender selection. Fetner Properties (Hal Fetner) and PGIM Real Estate Equity didn't try to fight the tape—they bought Murray Hill / Grand Central footage at $500 a square foot and paired it with the exact lender bucket built for this business plan. At $450,000 a door two blocks from Grand Central with 10-year fixed life-company leverage from Pacific Life, Fetner and PGIM bought Midtown residential cash flow well below replacement cost.