This Week’s N.Y. Deal Sheet
Christmas came early for a few developers and landlords in need of financing. The final business days of the year for the commercial real estate sector also saw a flurry of smaller office leases and sales close, even as snow remains a distant wish for many New Yorkers.
TOP FINANCING DEALS
RFR Holding notched a $1.1B refinancing deal from Citigroup and JVP Management for the Seagram Building, Commercial Observer reported. The recapitalization replaced a $789M senior CMBS loan and includes somewhere between $350M and $360M in fresh equity from JVP, which is also the mezzanine lender on the building. The building’s original senior loan closed in 2013 via Citigroup and extended in May as ownership navigated refinancing conversations.
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Monadnock Development, CB Emmanuel Realty and Equity Developer scored $256M to develop an affordable housing project in East Flatbush. The developers will replace a parking lot with permanently affordable housing, bringing 322 affordable apartments in total — including 89 supportive units for seniors, funded by the Empire State Supportive Housing Initiative. The project, dubbed Utica Crescent, will also have 23K SF of commercial space, a community facility and an on-site healthcare center. Funding came from the New York State Housing Finance Agency, which provided $122M in tax-exempt bonds enhanced during construction by JPMorgan Chase and more than $106M in low-income tax credit equity through Hudson Housing Capital.
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A Rockrose Development affiliate nabbed a $293M permanent loan for its Hudson Yards apartment building at 555 W. 38th St., Commercial Observer reported. The 51-story, 590-unit building with a 421-a tax abatement was completed in 2022 and has 30% of its apartments set aside as affordable housing, as well as 2K SF of retail space and 16K SF of amenities. The new debt, a five-year, fixed-rate Fannie Mae loan with Wells Fargo as the underwriter and servicer lender, retires a $255M construction loan Wells Fargo provided in 2019. A team from Avison Young’s Tri-State debt and equity finance group led by Andrew Singer, Scott Singer and Kathleen McSharry brokered the deal on Rockrose’s behalf.
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L+M Development Partners and Services for the UnderServed won $78M to finance their Marcus Garvey Extension project, a housing development in Brooklyn’s Brownsville neighborhood. The cash for the development’s 109-unit Building G, which will reserve 55 units as supportive housing, came from a combination of HFA tax-exempt bonds, HFA Supportive Housing Opportunity Program subsidy, and solar and geothermal tax credits, as well as Low-Income Housing Tax Credits. The project at 305 Chester St. will feature 25 studios, 46 one-bedrooms, 24 two-bedrooms and 14 three-bedroom apartments. It was one of four NYC projects to receive part of the nearly $300M Gov. Kathy Hochul announced this week.
TOP SALES
The Riese Organization has sold the five-story commercial building at 560 Fifth Ave. after more than five decades for $38M, according to a release. The buyer was Japanese coffee company Geshary, The Real Deal reported. A Colliers Capital Markets team led by Zach Redding and Dylan Kane represented the seller, with a CBRE team led by Daniel Kaplan repping the buyer.
The nearly 14K SF building was first listed in February, and ownership sought around $45M, the New York Post reported at the time, but its final sale price of roughly $2,800 per SF was the highest paid for a full building in New York this year, according to Colliers. The 1907-built property, steps away from Rockefeller Center and St. Patrick’s Cathedral, has more than 125 feet of wrapped frontage on Fifth Avenue and West 46th Street.
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The McSam Hotel Group sold a trio of hotels for $206.5M, Crain’s New York Business reported. A Hyatt hotel at 16 E. 39th St. sold for $51.3M after the group’s founder, Sam Chang, bought the site in 2016 for $31.9M. Chang scored another $76.3M for the Marriott Le Méridien at 292 Fifth Ave. after buying the site in 2017 for $42.4M. He took a small haircut on the DoubleTree by Hilton at 25 W. 51st St., nabbing $78.9M for the hotel after paying $94.1M for the site in 2016 — but saw overall profits of approximately $38M from the three sales, according to a Crain’s analysis of public records. The McSam Hotel Group has been on a selling spree of its assets as Chang reportedly prepares to retire, netting $450M for the Times Square hotel at 150 W. 48th St. and $76.5M for a Holiday Inn in Long Island City.
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Slate Property Group and RiseBoro Community Partnership closed on their $64M acquisition of a former hotel in Jamaica, Queens, with plans for it to become the first former hotel transformed into 318 units of permanently affordable housing, according to a release. The JFK Airport Hotel will be turned into the Baisley Pond Park Residences, the first project funded through New York’s Housing Our Neighbors with Dignity Act. Construction at the property, located at 144-02 135th Ave., is expected to take 21 months, turning the 350-room hotel half a mile from its namesake airport into income-restricted housing with amenities including on-site laundry and a fitness room.
Total development costs are projected to be around $167M, with $48M provided through the HONDA Act, with NYC Housing Development Corp. providing a $50M senior loan that will be credit enhanced and serviced by Chase, while NYC HDC and the NYC Department of Housing Preservation and Development are providing subordinate debt. The additional HDC funding comes from an allocation of 501(c)(3) bonds and won't draw on Low-Income Housing Tax Credits. MSquared also provided a $4.4M pre-development loan.
TOP LEASES
Silverstein Properties signed deals that span 50K SF at 120 Broadway, it announced this week. Sustainable architecture and urban design practice Studio Gang took 12K SF for half of the 34th floor, where it plans move from 50 Broad St. during the second quarter. Apparel brand Golden Goose signed a lease doubling its footprint, taking 27K SF in total in an expansion that began this month. Old Mission Capital, a global trading firm, also extended its time in the building and increased its space, going from 11K SF to 20K SF in an agreement set to go into effect in Q3 2024. Silverstein in recent years has added a penthouse for tenant use featuring a lounge and café, as well as amenities including a yoga room, conference facilities, a 1980s-inspired video arcade and a speakeasy on the 10th floor. Silverstein’s Joe Artusa repped the landlord in-house along with Newmark’s Erik Harris, Richard Gelber and Gary Alterman. Colliers’ Marcus Rayner and Sam Einhorn repped Studio Gang, Benchmark Properties’ Michael Beyda repped Old Mission Capital, and Golden Goose was repped by Savills’ Howard Simons.
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Marx Realty’s 545 Madison Ave. has signed luxury crystal-maker Baccarat to 10K SF, according to a release. The company will relocate its corporate offices to space in the building’s penthouse and mezzanine and will also get access to a private 18th-floor terrace. Marx Realty said it will build out the space’s design with Baccarat to add pieces from its crystalworks collection and to add the company’s logo near the building’s entrance. Cushman & Wakefield’s Tara Stacom, Harry Blair, Peter Trivelas, Remy Liebersohn, Connor Daugstrup and Bianca Di Mauro repped Marx Realty, while Lantern Co.’s Matt Siegel and Jessica Adler repped Baccarat.
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The office building at 1 E. 33rd St., across the street from the Empire State Building, is now fully leased after signing several apparel tenants to a total of 78K SF, according to a release. The largest lease went to Q4 Designs, which took 26K SF at the building. Pet products company European Home Designs signed for 13K SF of showroom and office space, relocating from 148 Madison Ave. Regal Jewelry took 13K SF in a relocation, and Jem International also relocated within the building from 12K SF to 19K SF. Franco Manufacturing, a home decor company, signed for 7K SF of offices. The 160K SF, 110-year-old property is owned by an LLC named 10East34th that belongs to Simeon Derenshteyn, according to public records. Koeppel Rosen LLC's Max Koeppel brokered the deals on behalf of the landlord.
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Gordon Property Group has signed tech-enabled residential mortgage servicer Valon Technologies to 14K SF at 860 Broadway, according to a release. The deal will see the company relocate from coworking space at 88 University Place to the fourth floor of the storied Union Square office building — once home to Andy Warhol’s Factory studio — during the first quarter. The 1926-built property was fully renovated in 2019, with Warhol’s former office serving as a conference room and Gordon working to build out the fifth floor of the property. JLL’s Seth Hecht and Thomas Swartz repped the landlord in the transaction, while Cushman & Wakefield’s Michael Movshovich and Troy Elias repped the tenant.
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SL Green’s 420 Lexington Ave. has a new tenant, with global talent solutions firm Vaco signing a 7K SF, 10-year lease for part of the 16th floor, according to a news release. The 1.5M SF property, also known as the Graybar Building, is 31 stories, was built in 1927 and was officially landmarked in 2016, according to SL Green's website. Savills’ Greg Taubin and Brian Scharfman repped Vaco, while Cushman & Wakefield’s Harry Blair, Tara Stacom, Bianca Mauro and Caroline Collins repped SL Green.
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Simone Development has signed two tenants to a total of 10K SF at the Hutchinson Metro Center in the Bronx, according to a release. The North Bronx Orthopedic and Spine Group has signed a 5K SF deal at 1200 Waters Place, a 433K SF, Class-A medical, academic and office property. MJHS Health System signed a lease of the same size at 1250 Waters Place, a 285K SF building spanning nine stories that also houses tenants including Montefiore Medical Center and Motion PT. The landlord had in-house representation, while North Bronx Orthopedic and Spine Group represented itself and CBRE’s Bill Jordan repped MJHS.
