The biggest loans of the slowest month: August’s real estate lending

Outer boroughs saw more large deals as Manhattan volume dropped by half

TRD New York /
Sep.September 11, 2020 07:00 AM
30-77 Vernon Boulevard in Queens and Cape Advisors CEO Craig Wood (left) and 720 West End Avenue in Manhattan with Brack Capital Real Estate CEO Ariel Podrojski (right) (Images via Cape Advisors; Google Maps; LinkedIn)

30-77 Vernon Boulevard in Queens and Cape Advisors CEO Craig Wood (left) and 720 West End Avenue in Manhattan with Brack Capital Real Estate CEO Ariel Podrojski (right) (Images via Cape Advisors; Google Maps; LinkedIn)

August was an odd month in New York City’s real estate lending market.

The 10 largest Manhattan loans recorded in July totaled just $428 million, the lowest total this year and less than half of July’s figure. That was less deal volume than in the outer boroughs, where the 10 largest loans totalled $673 million, just a slight decrease from the month before.

Citywide, the top 10 real estate loans recorded last month totaled $824 million, and most were in the outer boroughs — including the largest, a construction loan for an Astoria waterfront development.

A major reason for the drop-off in volume is that most big deals that closed prior to August had been in motion since before the pandemic. Large post-Covid deals have yet to materialize for the most part.

“Big deals take time — they don’t happen in a month,” said Adam Hakim of Meridian Capital Group, who arranged the Astoria loan. “Since Covid, price discovery hasn’t happened yet, so no one knows what anything is worth.”

At the same time, Hakim said he expects next year to be one of the busiest on record. “In the eye of a hurricane there is quiet, for just a moment,” he said, quoting the musical Hamilton. “When we come out of this and we really see the damage, that’s when it’s not quiet anymore — everybody needs a bridge loan, everybody has to restructure.”

“No one is saying they’re out of the market,” Meridian’s James Murad added, noting that lenders are still seeking opportunities to deploy capital. “Everyone has money. They’re just in the process of re-learning the market.”

Here were the city’s largest real estate loans in August:

1) Cape capital | Queens | $180 million (senior debt)

A joint venture between Cape Advisors and the Pioneer Group secured $280 million in debt and equity to develop a three-building, 534-unit mixed-income rental property on the Astoria waterfront at 30-77 Vernon Boulevard. Square Mile Capital Management provided the debt, which included a $180 million first mortgage and $45 million in mezzanine debt, while Denver-based real estate investment trust UDR provided the equity.

2) Brackish liquid | Manhattan | $111 million

Amsterdam-based Brack Capital Real Estate secured a $110.8 million refinancing for a former Salvation Army senior home at 720 West End Avenue, which it plans to convert into condos. The new debt, provided by Apollo Global Management and other investors in the care of Israeli law firm Yigal Arnon & Co., replaces a $38.75 million loan provided by the Salvation Army in 2015, when Brack acquired the property for $108.75 million.

3) Liquor lending | Brooklyn | $110 million

JPMorgan Chase Bank provided $110 million in financing to liquor distributor Empire Merchants for a portfolio of warehouses and parking facilities in eastern Greenpoint. The financing consisted of a $60 million gap mortgage on top of prior debt also provided by JPMorgan, more than doubling the debt on the properties. Empire Merchants was formed in 2007 as a partnership of companies owned by the Magliocco, Drucker and Merinoff families, according to its website.

4) Neumoney | Manhattan | $75 million

Former WeWork CEO Adam Neumann and partner Jeffrey Dagowitz secured a $75 million refinancing from G4 Capital Partners for a Chelsea development site at 123 West 23rd Street. In 2017, sources told The Real Deal that WeWork had considered building a WeLive co-living tower on the site. Neumann came close to refinancing the property for $100 million last fall, amid a cash crunch in the aftermath of the coworking firm’s botched plan to go public.

5) Debt-partment store | Brooklyn | $66 million

Macy’s put a new $66 million mortgage on its 500,000-square-foot condominium unit at 422 Fulton Street, on top of which Tishman Speyer is building a 10-story office tower known as the Wheeler. The Downtown Brooklyn property was previously unencumbered by debt, and the loan is part of a $3 billion secured asset based loan facility, according to Pincusco. The entire 620,000 square feet of office space at the Wheeler was leased in February to the Whittle School and Studios.

6) Renwick refi | Manhattan | $65 million

ORIX Real Estate Capital provided a $65 million refinancing to LIHC Investment Group for the 224-unit affordable housing property in Kips Bay at 332 East 28th Street, also known as the Renwick Gardens Apartments. The new debt replaces a $40 million mortgage provided by Greystone Funding in 2012.

7) New Lots, new loan | Brooklyn | $62 million

Arker Companies and the Domain Companies refinanced the Spring Creek Gardens apartments at 901 and 902 Drew Street in New Lots with $62.3 million from PNC Bank. The loan was then assigned to Freddie Mac. The properties include 582 residential units and seven commercial condominiums.

8) Refueled | Bronx | $56 million

Fuel and gas supplier Sprague refinanced its tank farm properties along the Bronx’s Port Morris waterfront with a $56 million loan from MUFG Bank. The new debt replaces a mortgage of the same amount provided by JPMorgan Chase in 2015. Sprague acquired the six parcels for $25 million in 2014, according to property records.

9) Crown Heights capital | Brooklyn | $50 million

Capital One provided a $50 million refinancing to Robert Rosenberg’s St. Johns I Associates for three multifamily properties in Crown Heights with a total of 190 residential units, at 1280 St. Johns Place, 1550 Sterling Place, and 1539 Sterling Place. The new debt replaces a $22 million mortgage first provided by Signature Bank in 2014.

10) A Leagem of its own | Manhattan & Queens | $49 million

Alexander Hajibay’s Leagem Partners secured a $49 million refinancing from New York Community Bank for four multifamily properties with a total of 214 residential units. Three of the properties are located in Inwood and one in Kew Gardens, Queens. The new debt replaces a $36 million loan by People’s United Bank in 2017.


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