This Week’s N.Y. Deal Sheet: Lender Takes Over Related's LIC Office Building
This week saw activity on the uptick for New York City’s industrial properties as well as a number of investment sales that show the market is beginning to have more pricing confidence.
TOP SALES
The Related Cos. has exited a troubled office property in Long Island City. Los Angeles-based credit firm BrightSpire Capital, Related's lender at 21-00 49th St., has acquired the building after the borrower had trouble managing the debt, Crain’s New York Business reports. Related Cos. sold the 130K SF Paragon Building for $64.3M to Brightspire in a deal that closed last week after months of whispers that Related intended to hand over the property in a deed-in-lieu of foreclosure arrangement. Related bought the building, which in a past life was an oil storage warehouse, from Samson Management in 2016 for $104M as part of a two-asset deal with BentallGreenOak. The joint venture spent $45M renovating the property, but defaulted on the loans backing the buildings earlier this year after being unable to sign tenants up for space.
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Empire Capital has acquired 529 Fifth Ave. for $129M from Silverstein Properties, The Real Deal reports. The Manhattan-based discount office shoppers secured aa $71.5M loan from Deutsche Bank for the purchase of the building, which has 254K SF of office and 27K SF of retail, with existing tenants including EZE Castle, the International Federation of Accountants and SDC Designs. Silverstein has owned the property, which was built in 1958, since 1978, and the 20-story building was 63% leased at the time of the sale. Newmark’s Adam Spies and Doug Harmon arranged the sale while their colleagues, a team led by Jordan Roeschlaub and Dustin Stolly, arranged the loan with Eli Kunstlinger of Meridian Capital Group.
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Eyal Ofer's Global Holdings has purchased 51 Irving Place for $30.69M, according to a release. Public records list the seller as SP Irving Owner LLC, with Adam Verner — founder and CEO of Springhouse Partners — signing for the LLC. The 57-unit multifamily property near Gramercy Park has 8K SF of ground-floor retail space. Global Holdings has a long history of luxury residential in New York City, including the development of 15 Central Park West, 520 Park Ave. and 18 Gramercy Park South. Its joint venture with Zeckendorf Development and minority partners Fortress Investment Group and Madison Capital at 15 CPW is facing foreclosure on the famed condo building's retail space.
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Witnick Real Estate Partners has acquired 525 Union Ave., a five-story luxury apartment complex in Williamsburg, for $26.8M, Crain’s New York Business reported. The seller, an LLC named 525 Union Avenue Realty Associates, is registered to a residential address in Chester, New York, owned by another LLC, Brookside Ave Holdings and owned by a private investor, Ronald Cohen. The property has 42 rent-stabilized, one-bedroom apartments that average 800 SF, and it sits three blocks away from McCarren Park. Witnick’s purchase comes 16 years after the LLC developed the property, and was assisted by two mortgages from Arbor Realty Trust totaling $24.7M.
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SL Green sold a 49.9% stake in 245 Park Ave., its full-square-block office tower in Midtown East, which valued the building at $2B. The buyer was a U.S. affiliate of Mori Trust Co., a Japanese developer. The REIT purchased the 1.8M SF Park Avenue building out of bankruptcy in September with the hopes of repositioning the property — with upgrades including a new facade, lobbies, retail storefronts and infrastructure changes — with a partner. The sale gave SL Green’s stock a 5.1% boost during premarket trading on Monday, bolstering the REIT’s financial standing after its bruised Q1 earnings and threats of a potential credit downgrade from Moody’s in May.
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Fairstead has sold its 10-building, 538-unit Central Harlem multifamily property, the Dunbar Apartments, to Isaac Herskovitz for $86.75M, according to a release. The sale price comes to a cap rate of 7.67%, $199 per SF and $161,546 per unit. The nearly century-old complex is designated by the National Register of Historic Places and spans an entire block from West 149th to West 150th Street and between Frederick Douglass and Adam Clayton Powell Jr. boulevards. The acquisition was funded by an $83M acquisition loan from MF1Capital, with Rosewood Realty Group's Aaron Jungreis, Ben Khakshoor, Alex Fuchs and Westwood's Steven Vegh repping both the buyer and seller in the deal.
TOP LEASES
The Child Mind Institute has signed an 82K SF lease at The Durst Organization’s 825 Third Ave., according to a release. The 530K SF, 42-story property is currently undergoing a $150M capital improvement program bringing operational efficiency and modernizing the building’s aesthetics. The nonprofit will have its own dedicated ground-floor entrance and will occupy the tower's second through fifth floors. Newmark’s Lance Korman and Brian Waterman repped Child Mind Institute, while Durst had in-house representation from Tom Bow, Ashlea Aaron, Lauren Ferrentino and Bailey Caliban.
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Startup scaffolding company Urban Umbrella has signed a 22K SF sublease, taking over space from sublandlord AxilHire at 154 Morgan Ave. in East Williamsburg, Commercial Observer reports. Asking rents in the industrial space were $35 per SF in a deal negotiated by Adelaide Polsinelli and Lauren Curcio of Compass on behalf of Urban Umbrella and by Rico Murtha, Sonny Singh and Helen Paul on behalf of AxilHire. The five-year sublease will allow the scaffolding firm to store its equipment in the warehouse and potentially to move out of a smaller warehouse in Far Rockaway to be closer to its Manhattan customer base.
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Building materials distributor Kamco Supply Corp. has signed for a new space in the Bronx. Kamco will take 58K SF of warehouse space in addition to 52K SF of land at Simone Development Co.’s 1200 Zerega Ave. property, using the space for storage and distribution of materials, according to a release. The property is now 60% leased, with 26K SF of warehouse space and 13K SF of office space remaining. Simone’s Josh Kopan repped the landlord in the deal, while DY Realty’s Mat Diana repped the tenant.
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Samco Properties signed tech consultancy Tritech Communications to 12K SF at its 333 Seventh Ave. office building, Commercial Observer reported. The consultancy is moving as it consolidates its two NYC offices to a single Chelsea location, and will join existing tenants the Fashion Institute of Technology, the New York City Board of Education and media company Barstool Sports in the property. Asking rents were $55 per SF, with Brett Harvey of JLL negotiating on behalf of Samco and Jim Wenk along with Kirill Azovtsev of Savills’ on behalf of Tritech.
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Commercial furniture seller Innovant has signed for 11K SF in 440 Park Ave. South, an office property built in 1913 that sits four blocks north of Madison Square Park, Commercial Observer reported. Asking rents in the Samco Properties-owned building were $65 per SF. Innovant signed a seven-year lease in the move from its current offices and showroom at 37 West 20th St. in the Flatiron District. Innovant reportedly plans to move to the 16-floor building before the end of the year, where it will occupy the entire ninth floor. JLL brokers were on either end of the deal, with Todd Stracci representing Innovant and Brett Harvey representing Samco.
TOP FINANCING
The Dominick Hotel, the 391-key hotel in SoHo that was formerly known as the Trump Soho New York, has scored an $83M refinancing deal from Ramsfield Hospitality Finance and funds managed by AB CarVal, according to a release. The 46-story hotel, with 11K SF of meeting space in addition to a spa and Michelin-starred restaurant Vestry, has a Five Diamond rating from AAA. The Dominick loan brings Ramsfield and AB CarVal’s total hotel investments to $1B over an 18-month period, and almost $3.5B of hotel debt and equity investments in total. CIM Group has owned the property since 2014 and rebranded it in 2017 soon after its former namesake took office in the White House.
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Investor Mordechai Piller nabbed a $78M construction loan from S3 Capital for a proposed residential project in Brooklyn’s Fort Greene neighborhood, Crain’s New York Business reported. The existing 26K SF office property currently on the 0.23-acre lot, built in 1930 and reportedly home to the Rockwell Dialysis Center, Brooklyn Hospital Home Care and disabilities services provider AHRC, will be replaced with an 18-story property including residential space and a cellar. Piller’s space will also be larger than the office tower if approved, reaching 160K SF of space in total.
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Related and the Hudson Cos. landed a $63M refinancing deal for their Roosevelt Island multifamily property, Crain’s New York Businss reported. Financing for the 214-unit, fully leased building at 480 Main St. came from Japanese bank SMBC. The bottom five floors are owned and managed by Memorial Sloan Kettering as housing for its employees. Related and Hudson’s joint venture, the Roosevelt Island Operating Corp., has been working toward the island’s community development goal and will bring more than 2,000 housing units — some condo, some rental — to the neighborhood via nine towers. The joint venture most recently scored $185M in construction financing in November for the last portion of its development, Riverwalk, which is expected to complete in 2025. The developers also own roughly 90K SF of retail on the island. Jordan Roeschlaub, Dustin Stolly, Chris Kramer, Nick Scribani, Ben Kroll, Tim Polglase and Michael Dorfman of Newmark put the deal together for the joint venture and the lender.
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Wildflower and Barings scored a $72M construction loan for an industrial project on Long Island, a 555K SF project located on currently vacant land at 1001 Express Drive North. Bank OZK provided the loan for the industrially zoned site slated to become a three-building project, Commercial Observer reported. Aaron Appel, Keith Kurland, Jonathan Schwartz, Adam Schwartz, Ari Hirt and Mo Beler of Walker & Dunlop handled the deal for both parties.
