Adellco signs $30.5M construction loan with Arbor Realty Trust for office renovation in Flatiron District

Adellco’s president through the entity 114 East 25th Ventures, LLC as borrower signed a rehab construction loan with lender Arbor Realty Trust through the entity Arbor Realty SR, Inc. valued at $30.5 million for the office building (O6) at 114 East 25th Street in Flatiron District, Manhattan.
Although Matthew Adell of Adellco signed for the loan, it was not clear who the beneficial owner of the property was. Adellco did not immediately respond to a request for comment.
The deal closed on January 19, 2024 and was recorded on January 26, 2024. The prior lender was Israel Discount Bank which held debt that had an original loan amount of $35 million.
The property has 48,236 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $631 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The unidentified owner bought the property from Prodigy Network and Shorewood Real Estate Group on June 12, 2020, for $41.3 million. The signatory for Adellco was company president Matthew Adell.

The property

The office building in Flatiron District has 48,236 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 41 feet and is 98 feet deep with a total lot size of 4,114 square feet. The zoning is C6-2A which allows for up to 6 times floor area ratio (FAR) for commercial and up to 6.02 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $12.6 million. The most recent loan totaled 0.0 and was provided by Israel Discount Bank on December 29, 2021.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received four DOB violations and $1,000 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on March 6, 2018. On the lot, there is one active major alteration construction project for a 48,400 square-foot B building. The project was submitted by William O’Connor with plans filed December 7, 2015 and permitted October 25, 2016.

The neighborhood

In Flatiron District, The majority, or 71 percent of the 23.2 million square feet of commercial built space are office buildings, with elevator buildings next occupying 15 percent of the space. In sales, Flatiron District has near average sales volume among other neighborhoods with $282.8 million in sales volume in the last two years and is the 29th highest in Manhattan. For development, Flatiron District has 2.2 times the average amount of major developments relative to other neighborhoods and is the 14th highest in Manhattan. It had 2.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 9 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other office buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of seven of the 12 commercial properties representing 1,131,457 square feet of the 1,221,989 square feet. The largest owner is Robert Getreu, followed by McSam Hotel Group.
On the tax block, there was one new building construction project filed totaling 39,171 square feet. It is a 129-unit, 39,171 square-foot hotel/dormitory/shelter (R-1) building submitted by McSam Hotel Group and filed by Sam Chang with plans filed February 25, 2015 and permitted January 7, 2016.

The majority, or 64 percent of the 1.2 million square feet of built space are specialty buildings, with office buildings next occupying 29 percent of the space.

The borrower

The PincusCo database currently indicates that Adellco owned at least one commercial property with 91 residential units in New York City with 53,525 square feet and a city-determined market value of $18.2 million. (Market value is typically about 50% of actual value.) The portfolio has $21.5 million in debt, borrowed from Lancewood Capital. The portfolio consists of at least a single hotel property. It is located in Manhattan.

Direct link to Acris document. link