New York City’s biggest borrowers of 2022

Self-storage empire, Fifth Avenue skyscraper among top 10 real estate loans

From left: Joseph Chetrit, Barry Sternlicht, David Rubenstein, Michael Dell, and Marc Holliday, along with 305 East 86th Street and 1540 Broadway (Getty, Carlyle, Google Maps)
From left: Joseph Chetrit, Barry Sternlicht, David Rubenstein, Michael Dell, and Marc Holliday, along with 305 East 86th Street and 1540 Broadway (Getty, Carlyle, Google Maps)

Lingering uncertainty in New York City’s office market and a virtual moratorium on new hotels allowed a self-storage deal to top the list of 2022’s largest real estate loans.

The 10 largest financing deals amounted to $8 billion, on par with 2020’s total but behind the $10.9 billion lent in 2019 on the 10 biggest projects.

The five largest loans of 2021 totaled $7.2 billion.

The nation’s largest office-to-residential conversion made the list, as did a 1,000-foot skyscraper rising on Fifth Avenue. SL Green kept plugging away on a 1.4 million-square-foot office building in Flatiron and private equity giant Carlyle Group was making moves in Brooklyn’s multifamily market.

Here are more details.

Mini storage, maxi loan | $2.15B

A Missouri-based self-storage company saw enough opportunity in Manhattan’s tiny living quarters to buy Edison Properties’ Manhattan Mini Storage for $3 billion, financing the deal with $2.15 billion from the real estate divisions of Citibank and Barclays. Jerry Gottesman, the founder of Edison Properties, died in 2017.

Public-private | $1.35B

Property managers, developers and construction companies including Wavecrest Management, L+M Development Partners and Hudson Companies received $1.35 billion to update New York City public housing.

The loans will pay for repairs, upgrades and private management for 5,200 NYCHA apartments in Williamsburg and East New York, Brooklyn. Tenant rents will remain capped at 30 percent of household income under the agreement, which relies on switching the developments to a more reliable federal rent subsidy.

Sweet Joe Chetrit | $714M

One of real estate’s most intriguing characters https://therealdeal.com/issues_articles/the-man-from-morocco/ fetched debt from the CMBS market to refinance and renovate the Yorkshire and Lexington Towers, two luxury rental buildings on the Upper East Side.

Bank of Montreal, Starwood Mortgage Capital and Citi Real Estate Funding issued the loans, which investors purchased as securitized bonds. The loan included mezzanine debt — secured by equity in the borrower rather than by the property — of $174.5 million.

Square deal | $590M

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The 44-story former Bertelsmann Building, an early Bruce Eichner development at 1540 Broadway in Times Square, received $590 million to refinance its office space from Apollo Global Management, Michael Dell’s MSD Partners and Monarch Alternative Capital. Edge Fund Advisors and HSBC own the building’s offices (and Vornado, its retail).

One for all | $575M

The owners of One Madison Avenue, a 1.4 million-square-foot office redevelopment in Flatiron, secured $575 million in construction financing from Wells Fargo, which has originated $1 billion in loans for the project since 2020. A joint venture partnership of SL Green Realty, Hines and the National Pension Service of Korea is spending about $2.3 billion on the project.

Fisher catches refi | $575M

Fisher Brothers refinanced Park Avenue Plaza, a 1.2 million-square-foot office building at 55 East 52nd Street in Midtown, with $575 million from Morgan Stanley. The lender also replaced BlackRock as a tenant, taking 400,000 square feet in the building. The debt was sold to investors as commercial mortgage-backed securities.

Fifth Ave fixture | $540M

Rabina wrangled $540 million from Bank OZK and the Carlyle Group to build a 1,000-foot skyscraper at 520 Fifth Avenue between 42nd and 43rd streets. The 450,00-square-foot building will include retail, offices and 98 apartments. It will be the second-tallest building on Fifth Avenue, after the Empire State Building. KPF is the architect.

Conversion of interests | $536M

Michael Dell’s MSD Partners and Apollo Global Management funded the nation’s largest office-to-residential conversion, at 25 Water Street in the Financial District, to the tune of $536 million. The developers — Jeffrey Gural’s GFP Real Estate, Metro Loft Management and Rockwood Capital — plan to convert the 1-million-square-foot building into 1,200 rental units.

Clever Carlyle | $500M

After private equity behemoth Carlyle Group bought more than three dozen small multifamily properties in Brooklyn and Queens, it secured a loan of up to $500 million from Invesco Real Estate. The properties, classified as 2A/2B because they have no more than 10 units and are mostly free-market, have limited tax exposure and are not hamstrung by New York state’s 2019 rent-stabilization law.

Goliath & Goliath | $438M

Brookfield Properties received $438 million from Apollo Global Management to build a 921-unit residential building in Mott Haven, a South Bronx development hotbed. The project, at 101 Lincoln Avenue, is part of a larger development by Brookfield that will yield more than 1,350 apartments across 4.3 acres. Some 30 percent will be affordable.