This Week’s N.Y. Deal Sheet
Financing deals and leasing sprang into action this week in New York City, even as liquidity questions linger for banks and other lenders.
TOP FINANCING DEALS
JPMorgan Chase has agreed to provide a $500M condo inventory loan to Extell Development for its 217 West 57th St. property known as Central Park Tower, The Real Deal reports. The loan is secured by 87 apartment units at the property that were unsold at the time of the loan's closing; that is approximately half the building’s inventory. Sales have closed on just 81 units, with two more reportedly under contract. The property has delivered 40% below the $4.1B sellout price that Extell expected, generating $1.6B in sales to date. JPMorgan’s loan replaces $380M in mezzanine debt with a 14% interest rate from Baupost Group and Sail Harbor Capital that was scheduled to mature in June. The loan closed in late January, but received little attention after being incorrectly recorded as $5M, per TRD.
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Wildflower Ltd. scored a $143M financing deal for its College Point Logistics Center in Queens, according to a release. The financing consists of a $94M floating-rate construction loan and $49M of equity. The planned Class-A warehouse space, totaling 81K SF of rentable industrial space and 160K SF of parking over two floors, due to be completed during the second quarter of 2024, will be located at 28-02 Whitestone Expressway. A Walker & Dunlop team including Jonathan Schwartz, Aaron Appel, Mo Beler, Ari Hirt and Triston Stegall arranged the financing. Wildflower owns the project with joint venture partner Drake Real Estate Partners, and the lender and equity investor were undisclosed. The mortgage hasn't yet appeared in New York City property records.
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Developer Lendlease nabbed a $4M grant from NYSERDA to finance the development of a geothermal exchange system at its 1 Java St. residential development, according to a release. The 2.6-acre site will have five interconnected buildings, providing the Brooklyn neighborhood of Greenpoint with 834 units. The geothermal system, which will power the development using a geothermal heat exchange system, will make it the largest all-electric multifamily project in New York State, per the release.
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The developers reinvigorating the historic Jacob Riis Park bathhouse have obtained a $47.5M loan to fix damages caused by Superstorm Sandy, Crain’s New York Business reports. CBSK Developers, Brooklyn Bazaar and Aulder Capital will use the financing — a $15M historic tax credit equity investment from Foss & Co. and a $32.5M construction loan from Procida — to complete works on the bathhouse by summer 2024. The developers will also contribute $17.5M of funding themselves to reach the total estimated project cost of $65M. Planned renovations include repairs to the property’s windows, turrets and facade, in addition to adding eateries on the rooftop and ground floor, plus beachfront bar space and retail locations. Jacob Riis Park has been part of the National Park Service since 1972, with the NPS choosing Brooklyn Bazaar for renovations via a request for proposals. Brooklyn Bazaar signed a 60-year lease for the property with CBSK in October.
TOP SALES
Lalezarian Properties has bought 650 First Ave., a Murray Hill office building that it plans to convert into housing, from Princeton International Properties for $33.5M, Commercial Observer reports. Lalezarian and Princeton worked together to get conversion approval from the New York City Department of Buildings, receiving permission one day before the sale closed. The planned redevelopment will bring 23K SF of commercial space and 116K SF of housing — somewhere between 111 and 113 units, per plans filed with the city — to the neighborhood. The sale also paid off the $27M balance on a 2016 loan to Princeton from Signature Bank, leaving the building debt-free.
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We Care Trading Co. has sold the Cambria Hotel New York to Concord Hospitality for $48.4M, Commercial Observer reported. The site at 123 West 28th St. has been owned by We Care since 1994, and the 135-key, 18-story hotel was We Care’s first hotel project when it opened in 2015 after partnering with Choice Hotels and Concord. The sale closed on March 13, with Concord scoring $33M from Western Alliance Bank to refinance We Care’s previous loans on the property. Concord has served as the hotel's operator, and it now takes over as the owner as well.
TOP LEASES
SL Green’s One Madison development is now 59% leased, following a full-floor, 29K SF lease to cybersecurity firm Palo Alto Networks. The 1.4M SF office tower is currently due to be completed in October, five weeks earlier than originally planned, and will feature a 10K SF rooftop deck, a 7K SF amenity space for tenants, a 54K SF fitness club operated by Chelsea Piers and a food market operated by Michelin-starred Chef Daniel Boulud. JLL’s Paul Glickman, Alexander Chudnoff, Benjamin Bass and Diana Biasotti represented SL Green in the deal, while Newmark’s Brent Ozarowski, Kevin Sweeney and Kevin Sullivan represented the tenant.
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Fisher Brothers’ 605 Third Ave. has a new tenant: law firm Michelman & Robinson. The Los Angeles-based firm signed for 20K SF, 44-story Midtown office property built in 1963, taking space on the newly designed 30th floor. Newmark’s Scott Brown represented the tenant in the 10-year lease deal.
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Community High School has signed for 35K SF in Downtown Brooklyn for 30 years, Commercial Observer reported. The five-story property, owned by Mattone Investors, is currently leased out to the City University of New York, with the charter high school replacing CUNY’s lease at asking rents of $50 per SF. The school is part of the Community Partnership Charter School network, which operates an elementary school in Fort Greene and a middle school in Bedford-Stuyvesant.
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Bathhouse Spa is expanding into Brooklyn Brewery’s old space, Commercial Observer reported. The spa, which currently has 10K SF at 103 North 10th St., has signed a lease for 18K SF at 56 Berry St., adjacent to its existing location, in a direct deal where asking rents were roughly $90 per SF. The 18K SF will be split across 10K SF in the warehouse at 56 Berry and another 8K SF on the rooftop. This is Bathhouse Spa’s second expansion since the pandemic began, following a 15-year lease for 34K SF at 7 West 21st St., a converted parking garage owned by Friedland Properties that the bathhouse signed in October 2021.
