This Week’s N.Y. Deal Sheet
This week in New York City, a tech company fresh off an IPO grew its office space, deed transfers from the sale of the Flatiron Building hit city records, and a luxury condo skyscraper delivering just two dozen apartments landed financing to start construction.
TOP FINANCING DEALS
Five Points Development scored a $180M financing package to fund the construction of its 56-story, skinny condo tower at 262 Fifth Ave., The Real Deal reported. The loans consist of three sums totaling $130M from Madison Realty Capital — $90M of construction financing, $20M of mezzanine debt and $20M of senior debt replacing a loan from bridge lender Maxim Capital Group — as well as a $50M mezzanine loan from Cottonwood. The site has been in Five Points’ possession since 2015 when it purchased it for $17M, but its development plans have drawn controversy in the past. While the tower would be 140 feet shorter than the neighboring 1,000-foot supertalls, The New York Times reported that it would block views of the Empire State Building, while Crain’s New York Business reported that the tower would add just 26 apartments to the city’s housing supply despite reaching 56 stories.
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BridgeCity Capital has agreed to lend $60M to an East Williamsburg residential development, Commercial Observer reported. The construction loan covers the development of a 136-unit property at 828 Metropolitan Ave., a property owned by Prospect Developers II, according to public records filed with the city. As a beneficiary of the since-expired 421-a tax abatement, roughly 37 units will be reserved as affordable housing, and the ground floor will contain retail space. Construction is expected to be completed in 2025.
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MSD Partners, Michael Dell’s merchant bank affiliate, has agreed to lend $100M to a joint venture of David Werner Real Estate and Cammeby’s International Group, PincusCo reported. The fee is secured by the property underneath a 324-unit co-op called Carnegie House at 100 West 57th St. where ground lease payments are expected to rise, according to The Real Deal. Iron Hound Management’s Robert Verrone arranged the deal, while a team from Fried, Frank, Harris, Shriver & Jacobson arranged the legal agreements behind it.
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BWE, a multifamily mortgage banking company, has originated a $16.9M loan for development partner Rockabill to refinance a 147-unit senior affordable housing development in Yonkers, according to a release. The property, Monastery Manor, is owned by local nonprofit Finian Sullivan Corp. The refinancing will go to paying off existing debts and carrying out renovations at the property.
TOP LEASES
Energy transition-focused investor ECP has signed a deal to expand its footprint at One World Trade Center to 26K SF, according to a release. ECP is quadrupling its space, having previously signed for 6K SF in 2017 and a further 5K SF in January this year. One World Trade Center is now 95% leased, according to brokers on the deal. Newmark’s David Falk, Peter Shimkin, Hal Stein, Jason Greenstein and Nathan Kropp, plus The Durst Organization’s Eric Engelhardt and Karen Rose, repped landlords Durst Organization and the Port Authority of New York and New Jersey. Newmark’s Eric Zemachson and Corey Borg repped ECP.
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Instacart has signed a sublease agreement to take 21K SF from software startup Bizzabo at Two Trees Management’s 50 West 23rd St., Commercial Observer reported. The grocery delivery company plans to move into the 13-story building in Chelsea as it expands following its debut on the Nasdaq Stock Market in September. Asking rents weren't disclosed, but averages in Chelsea were $82 per SF during the third quarter, according to Colliers data.
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Eaglestone has signed for 21K SF at The Feil Organization’s 551 Fifth Ave., according to a release. Asking rents in the Midtown Class-A property known as the Fred F. French Building were $58 per SF, with Eaglestone taking up the whole ninth floor in the 10-year deal. Eaglestone, a holding company that acquires and supports mechanical, fire protection, plumbing and electrical firms in the Northeast, is relocating from 55 Broad St., which is expected to undergo an office-to-residential conversion. Eaglestone subsidiary PJ Mechanical will take up the majority of the space at 551 Fifth Ave., with the remaining space divided between Eaglestone’s corporate headquarters and another of its subsidiaries.
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The South Bronx Overall Economic Development Corp., a longtime nonprofit developer known as SoBro, has renewed its 138K SF lease with the city for an industrial storage property in the Bronx, 131 Walnut Ave., Commercial Observer reported. SoBro leases the space to fine art storage company Transcon International. The deal was first reported in the City Record. SoBro has rented the city-owned property since 1982 and is on the hook to pay $1.25M in back rent when it signs the new lease, covering the building’s real estate taxes and additional rent, in addition to a base annual rent of $714K that will increase by 3.5% every two years.
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Davis & Gilbert has renewed and expanded its lease at Rudin Management’s 1675 Broadway, Commercial Observer reported. The law firm will occupy 98K SF in the 35-story building, expanding by 12K SF with the 13-year deal. Davis & Gilbert will take over the 12K SF that cryptocurrency exchange Apifiny previously occupied on the top floor of the building before it vacated, adding it to its lease for the rest of the 35th floor and the 31st through 34th floors. CBRE’s Lewis Miller, Michael Wellen and Christopher Hogan of CBRE repped the law firm, while Rudin’s Robert Steinman repped the landlord in-house.
TOP SALES
The new ownership coalition for the landmarked Flatiron Building closed two deals buying out former owners this week, PincusCo reported. The deals came to a total of $47M, with $40.2M going to attorney Nathan Silverstein, who was ousted from his ownership stake in the iconic NYC office building in the spring when it went to auction to resolve years of disagreements among its owners. A further $6.7M went to Gregg Schenker, with the new ownership venture of The Brodsky Organization, GFP Real Estate and Sorgente Group paying out both sums. Former owner ABS Real Estate Partners is also no longer part of the ownership coalition, Bisnow reported last month when new ownership announced formal plans for residential conversions of the Flatiron Building, although a payout for ABS hasn't yet been reported.
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RockFarmer Properties sold three buildings in the Queens neighborhood of Ditmars Steinway for a combined $21M, PincusCo reported. An entity named FBL Rowan LLC, owned by Weitao Shi and Yong Chen, was the buyer of the properties, located at 21-13 31st St., 21-01 31st St. and 21-07 31st St. The buildings are zoned for retail use and have a total of 18K SF of built space in addition to 38K SF of air rights.
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A 60K SF office building in Midtown West sold for $34.7M, PincusCo reported. The buyer was Jack Elo through the limited liability company Minako Realty, and the seller was Robert Posner. The sale covers an office property at 6 West 48th St. and was financed by a $21.5M acquisition loan from Hirshmark Capital, which also covers an office building on Third Avenue in Gowanus. Elo is also engaged in a lawsuit delaying a hotel project from Extell Development on the same block in Gowanus, according to PincusCo. The 12-story Midtown West office building is in the center of the Diamond District and has tenants including a FedEx Ship Center, Ginza Spa and Rockefeller Philanthropy.
