This Week’s N.Y. Deal Sheet
Less than a week after a major bank failure, financing activity picked up in New York City, with large office and construction loans showing some lenders are finding a little more confidence in the city's real estate market.
TOP FINANCING DEALS
Crédit Agricole CIB and Landesbank Baden-Württemberg have agreed to provide a five-year green loan of $160M to BlackRock Realty Advisors and L&L Holding Co. for the 575K SF boutique office building at 600 Third Ave., the landlords announced. The 1970-built, 42-story Class-A property recently underwent an upgrade program that included lobby and plaza renovations and is 94% leased.
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New Jersey-based developer and owner Spaxel and alternative investment manager Atalaya Capital Management scored an $81.7M financing package for the acquisition of three multifamily properties in the Bronx, according to a release. The $50.8M financing was provided by CIT Bank, and $30.9M in limited partner equity came from CBRE Investment Management. The properties, located at 2710 Creston Ave., 2250 Aqueduct Ave. and 1751 Monroe Ave., have a total of 179 affordable units and will be Passive House-certified. A Walker & Dunlop capital markets team of Aaron Appel, Mo Beler, Jonathan Schwartz, Adam Schwartz, Keith Kurland and Michael Ianno arranged the financing.
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The Brodsky Organization nabbed a $155M construction loan from M&T Bank and the Bank of New York for a mixed-use development at 499 President St. in Gowanus. The 322K SF project is planned to bring 350 units to the Brooklyn neighborhood, with 25% earmarked as income-restricted under the now-expired 421-a tax break. The Brodsky Organization joins Avery Hall Investments to build the property, which will also feature 20K SF of ground-floor retail and resident amenities including coworking spaces, an outdoor swimming pool and outdoor rooftop amenities.
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Fetner Properties and the Lions Group’s joint venture, America Lions, obtained a $350M loan for a luxury Long Island City mixed-use development. The development, located at 26-32 Jackson Ave. and known as The Italic, will bring 363 studio, one-, two- and three-bedroom units to the popular Queens neighborhood, along with a substantial amenity package including a rooftop terrace, a golf simulator and a basketball court. The majority of the units will be market rate, with 30% reserved as affordable. A JLL team arranged the joint venture between Fetner and Lion, and JLL's Christopher Peck, Alex Staikos, Rob Hinckley, Steven Rutman and Nicco Lupo arranged the financing for America Lions. The lender wasn't disclosed.
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Gindi Capital and Avery Hall notched a $110M construction loan from Affinius Capital to continue developing their 13-story, 193-unit multifamily property in between Brookyn’s Gowanus and Park Slope neighborhoods, according to a release. Gindi and Avery Hall broke ground last year and are due to finish construction in 2024 after acquiring the site — located inside a qualified opportunity zone — in 2019. The half-acre site is located on Fourth Avenue in between Union and Sackett streets and had been vacant after previously housing a service station. JLL’s Christopher Peck and Peter Rotchford arranged the financing.
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DH Property Holdings has secured an $88M loan from Athene, Apollo Global Management’s retirement services subsidiary, to refinance an industrial outdoor storage development in Staten Island, Commercial Observer reports. The 1900 South Ave. site was acquired by Dov Hertz's firm in December 2020, which then acquired adjacent parcels of land in 2021. Hertz now has more than 50 acres along the borough’s waterfront zoned for industrial, warehouse and distribution space, with tenants including City Asphalt and Insurance Auto Auctions. The debt was arranged by a Walker & Dunlop team led by Aaron Appel, Jonathan Schwartz, Adam Schwartz, Keith Kurland and Michael Ianno.
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Goldman Sachs will lend $60M to Circle F Capital and Rockfeld Group to refinance a five-story, mixed-use office and retail building located at 400 West 14th St., Commercial Observer reported. The owners recently upgraded the 112-year-old Meatpacking District property and leased 10K SF at the building’s base to luxury fashion house Gucci, in addition to use of the billboard on the building’s rooftop. Circle F is a third-generation firm led by Gary Feldman, with a portfolio including Tribeca office space at 335 Broadway and a multistory department store at 301 West 125th St. in Harlem, while Rockfeld Group is a fourth-generation firm managed by Steven Feldman that has completed over 1M SF of office and retail repositionings since its founding in the 1930s. Jordan Roeschlaub, Dustin Stolly and Daniel Fromm of Newmark arranged the loan.
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Developer Elad Group has notched a $100M loan from Valley National Bank for three Upper East Side buildings, Crain’s New York Business reports. Elad Group bought the properties, located at 1297-1299 Third Ave. and 204 East 75th St., for $61M from Premier Equities, property records filed with the city show. The developer reportedly plans to build a 33-story multifamily property on the site, but plans have long been controversial: Last year, an urban planner filed a zoning challenge to block the development on the basis that the tower’s planned entrance was “illegal” because of its failure to comply with height requirements, Patch reported. Premier Equities bought the site for $26M, then teamed up with Thor Equities in 2017 and filed plans for a 100K SF, 31-story condominium tower, Commercial Observer previously reported. Elad Group’s purchase came after its previous owners secured approval for plans for a 33-story, 47-unit tower totaling 140K SF, The Real Deal previously reported.
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A $68M loan on the embattled Ace Hotel, located at 225 Bowery, has been purchased by the Northwind Group, The Real Deal reported. The hotel’s principal owner, Omnia Group, put the property into bankruptcy in January in an attempt to stave off foreclosure efforts by Bank Hapoalim, which it owed $78M. Northwind has now purchased the lion’s share of that debt from Bank Hapoalim, putting itself in position to acquire the hotel through a bankruptcy sale or a foreclosure. Omnia first acquired the tenement property in 2014 for $30.5M, partnering with hospitality chain Ace Hotel Group to turn the 10-story building into a 200-key micro-hotel and borrowing $68M from Bank Hapoalim to fund the changes. But the hotel closed during the pandemic, reopening as a homeless shelter for a year, then being rebranded as the hotel to list rooms on Airbnb in summer 2021 when its contract with the city ended.
TOP LEASES
Furniture designer MillerKnoll has agreed to expand its space in the Feil Organization's 251 Park Ave. South by 15K SF. The lease brings MillerKnoll’s total space in the property to roughly 60K SF, after moving into 44K SF in the building in 2016, Commercial Observer reported. The 16-story boutique office tower was built in 1909 and acquired by Feil in 2015, after which it underwent a multimillion-dollar renovation effort. Asking rents for 251 Park Ave. South weren't disclosed, but were $77.35 per SF on average for Midtown South during Q1, per CO.
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Life sciences firm Aanika Biosciences is quintupling it space at Industry City, Commercial Observer reported. Aanika signed for 25K SF, moving from under 3K SF on the sixth floor of Building 6 at the 16-building Sunset Park campus to 27K SF across the entire third floor. The company’s new space will include pre-built labs for its research on microbial tags, which can be used to track foodborne illnesses’ spread. Aanika will relocate within the next two months thanks to the deal brokered on behalf of both the tenant and Industry City’s owners — Belvedere Capital, Jamestown and Angelo Gordon — by Industry City’s own Jeff Fein. Asking rents were $35 per SF.
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Lidl is coming to Chelsea, with the German discount grocery store signing a 23K SF lease at MAG Partners’ 335 Eighth Ave., a 188-unit rental project. Asking rents for the ground-floor retail space were $150 per SF and $60 per SF for the basement, The Real Deal reported. MAG Partners is breaking ground for Lidl to start its 15-year lease in 2025. Lidl has one existing Harlem location in NYC, with two other planned locations — a 33K SF store in Crown Heights and a 25K SF Park Slope shop — on the way. Lidl was repped in the Chelsea deal by CBRE’s Stephen Sjurset and David LaPierre, while Cushman & Wakefield’s Alan Schmerzler and Sean Moran repped MAG Partners.
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Arc’teryx is setting up shop down the block from its current home in SoHo, Commercial Observer reported. The Canadian outdoor brand is moving its flagship from 4K SF at 547 Broadway to 14K SF at the Chelsfield Group’s 580 Broadway, a more than tripling in size from its current location. Ariel Schuster of Newmark arranged the deal on behalf of Arc’teryx, while Robin Zendell & Associates’ Robin Zendell brokered it for Chesfield. The landlord didn't disclose asking rents, but Commercial Observer reports that the average asking rent for retail on the block was $369 per SF during Q1 this year.
TOP SALES
Germany-based investment firm Tatar Holding is making its New York City debut with a $30M purchase of three properties totaling 66 apartments, Commercial Observer reported. The buildings, located at 163, 165 and 167 Ludlow St., were most recently purchased by Magnum Real Estate Group in 2021 for $16.5M. Tatar’s purchase involves taking on the properties’ existing debts, including a $23.5M CMBS loan from the Bank of Montreal that has a 2030 maturity date. PD Properties’ Elad Dror advised Tatar in the sale.
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Extell Development squeezed $82M out of the Metropolitan Transportation Authority for a site at 160 East 125th St., in a deal that the MTA reportedly believed cost 80% more than the site was worth, Crain’s New York Business reported. The MTA had considered using eminent domain to acquire the site, but wanted to avoid a battle in court that it felt could threaten $7.7B in federal funding for the Second Avenue Subway project. The MTA’s initial appraisal put the site’s value at $45.4M, while Extell claimed it was worth $114M after paying $39M for part of the site in 2014 and $21M to buy out a supermarket lease on the neighboring site. Extell and the MTA have reportedly been locking horns over the site’s value for the past two years, with the city agency voting to approve Extell’s offer — which included permission for the MTA to construct ventilation shafts on a neighboring parcel, 167 East 124th St, that the developer still owns — on April 26.
