This Week's N.Y. Deal Sheet
The debt market has roared back to life in New York City's commercial real estate, in contrast to still-muted sales and leasing activity.
TOP FINANCING DEALS
The owner of the Empire State Building has secured $715M of new debt in a sign of lender confidence in certain New York landlords. Empire State Realty Trust's new senior unsecured revolving and term loans can be expanded to $1.5B, if certain conditions are met, and mature in five years, Crain’s New York Business reports. The loans include $620M in unsecured financing with an interest rate of 6.6%. The debt replaces an existing $1.1B credit facility that matured next year. BofA Securities Inc. and Wells Fargo Securities LLC were the primary underwriters, according to Traded, with JPMorgan Chase Bank and U.S. Bank National Association as joint lead arrangers. The senior managing agents are Bank of Montreal and Goldman Sachs Bank USA, and Bank of America is acting as the sustainability structuring agent and administrative agent.
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Blackstone Group nabbed a $308.5M CMBS loan originated by Morgan Stanley for the 36-story office tower at 65 E. 55th St., PincusCo reported. The loan replaces 2019 CMBS debt, also from Morgan Stanley. Blackstone spent $750M to acquire the 622K SF property in 2014. It tried and failed to sell the building for $800M shortly after it took out the previous $560M loan in 2019, which had a securitized portion worth $425M, due to the pandemic and remote work. Availability was 23% at the time of the last refinancing but is now 14%, according to CoStar data reported by The Real Deal.
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Naftali Group scored two big loans this week. The first was a $238M sum from Bank OZK to finance Naftali’s 470 Kent Ave. project in Williamsburg, The Real Deal reported. The new loan is split into a $178.6M building loan and a $59.4M project loan. The three-building residential project on the Brooklyn waterfront, on which Naftali is partnering with Access Industries, will feature two rental buildings and one condo, totaling 561 units. The rental buildings will also benefit from the 421-a tax break, with 30% of the units reserved as affordable housing. Bank OZK previously provided a $310M senior loan for the project and Barings supplied a $75M mezzanine loan.
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Naftali Group’s second big loan this week came from Bank Hapoalim, which provided $177.5M in construction debt for a 45-unit condo project on the Upper West Side, PincusCo reported. The project at 211 W. 84th St. will span 155K SF once complete. The deal closed earlier this month and replaces a previous loan, also from Bank Hapoalim, worth $48.6M.
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Slate Property Group’s debt financing arm, SCALE Lending, has originated a $140M construction loan for Clipper Equity to build a 354-unit property in Brooklyn’s Flatbush neighborhood. The seven-story project at 2366 Bedford Ave. is part of the affordable housing-focused redevelopment of the Sears catalog printing facility. The loan will be deployed mid-construction, with the project expected to complete in the third quarter of next year. Landstone Capital Group’s Leah Paskus arranged the loan.
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Elie Pariente’s EMP Capital Group notched a $109M construction loan from QuadReal Property Group for the 247-unit multifamily development at 1034-1042 Atlantic Ave., according to a release. The loan is a five-year, interest-only sum and will facilitate the construction of two towers with a mix of studio, one-, two- and three-bedroom units. It replaces existing debt and will also be used to fund ongoing development costs. Walker & Dunlop’s Aaron Appel, Keith Kurland, Jonathan Schwartz, Adam Schwartz, Jordan Casella and William Herring arranged the debt for EMP Capital.
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Allure Group scored a $108.2M bridge loan from Dwight Mortgage Trust to refinance a 31-story multifamily project in Brooklyn’s Bath Beach neighborhood, Commercial Observer reported. The property, named The Shoreline, is located at 2230 Cropsey Ave. and will deliver 248 units to the neighborhood. The loan will go toward replacing previous debt, finishing up construction and beginning the lease-up process, with the building’s opening expected to occur later this year.
TOP LEASES
Citizens Bank has signed a 74K SF lease at Paramount Group's 1301 Sixth Ave., the landlord announced. The bank is consolidating several of its New York City offices, including its 18K SF lease at The Kaufman Organization’s 437 Madison Ave., a source with knowledge of the deal told Bisnow. Frank Doyle, David Kleiner and Andrew Coe of JLL repped the landlord in the 15-year lease, while Cushman & Wakefield’s Locke Burnette, Adam Ardise, Stephen Bellwood and JLL’s Frank Doyle repped Citizens.
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BXP has signed asset management firm LibreMax Capital to 21K SF at its 601 Lexington Ave. office tower, Bisnow has learned. LibreMax is relocating to part of the 30th floor of the 1.6M SF, 59-story tower for a 10-year period, moving one block away from its current spread at 600 Lexington Ave. Asking rents were $96 per SF, with CBRE’s Silvio Petriello and Tim Freydberg repping the tenants while JLL’s Frank Doyle, Cynthia Wasserberger, David Kleiner and Andrew Coe repped BXP.
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New Jersey-based gym chain Fitness Factory has signed a 22K SF lease at Nortco Development’s 12-story condo project in Harlem, Commercial Observer reported. Asking rents at 362 W. 125th St., were between $50 and $60 per SF. The gym is Fitness Factory’s first location in New York City and will be in the lower level and second floor of the property. The 27-year-old chain has 15 locations in total between its home state and just north of NYC in Yonkers. Eli Yadid and Ori Melloul of Kassin Sabbagh Realty repped both Nortco and Fitness Factory in the deal.
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The Stahl Organization has signed 175K SF of leases at its 277 Park Ave. office tower, according to a release. Trading firm Sumitomo Corporation of the Americas signed a 50K SF lease for the entire 15th floor with representation from Marc Shapses and Eva Shih of Savills. Banking financial services company Sumitomo Mitsui Banking Corp. signed for the entire 16th floor, adding a further 50K SF to its 266K SF in the property, with representation from Michael Liss and Eric Thomas of CBRE. Private equity firm Arsenal Capital Management LP took 47K SF, spanning the whole 33rd and 24th floors with representation from Josh Friedman and Neil Goldmacher of Newmark.
Two tenants, an unnamed international bank and ERM Engineering & Consulting Inc, signed for a little over 12K SF each, with Cushman & Wakefield’s Aron Schreier and Jonathan Schindler repping the bank and Savills’ Kirill Azovtsev repping the consulting firm. The final deal was the Ontario Teachers’ Pension Plan, which took 5K SF on the 47th floor with representation from Larry Carroll of Cushman & Wakefield. The landlord of the 850K SF office tower was repped by Mark Boisi, Bryan Boisi and Stephen Bellwood of Cushman & Wakefield in all of the deals in the 850K SF office in Midtown East. Stahl recently completed a $120M capital improvements program and now has reached 98% occupancy in the building.
TOP SALES
Urban Resource Institute snatched up 951 Olmstead Ave. in the Bronx’s Unionport neighborhood, for $64M, Commercial Observer reports. Heights Advisors sold the site, where it has been developing a 161-unit homeless shelter after the New York City Department of Homeless Services chose it as the location for a new shelter in 2016. The project reportedly stalled until 2020, at which point the city agency put forward a new proposal for a shelter run by Urban Resource Institute.
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Midas Hospitality has acquired an almost-finished hotel in Downtown Brooklyn out of bankruptcy for $34.8M, Commercial Observer reported. The sellers of the 22-story, 100-key hotel at 291 Livingston St. were Hello Living and Aview Equities. Construction started at the Gene Kaufman-designed tower in 2019, but the developers placed it into bankruptcy in May 2022 because they ran out of funds to finish the project. Acres Capital, the lender at the time, sued to foreclose on the project after Aview defaulted on a $30M loan on the hotel.
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Crowne Partners has acquired the Crowne Plaza JFK Airport hotel, located at 138-10 135th Ave., from GFI Capital Resources Group for $79.2M, Commercial Observer reported. GFI purchased the 335-key hotel in 2017 for $58.1M, then spent more than $16M renovating it. The hotel has been used as a shelter for asylum seekers, housing 330 migrant families last summer.
