A&E Real Estate signs $60.9M refi loan with Mesa West for seven Queens rental buildings

A&E Real Estate Holdings through the entity 132-70 Sanford Avenue, LLC as borrower signed a refi loan with lender Mesa West Capital through the entity Mesa West Real Estate Income Fund V, LLC valued at $60.9 million for seven properties including the 78-unit residential elevator building (D1) at 132-70 Sanford Avenue in Flushing, Queens, 50-unit residential walkup building (C1) at 151-10 35th Avenue in Murray Hill (QN), Queens, and 48-unit residential walkup building (C1) at 40-11 79th Street in Elmhurst, Queens.
The deal closed on August 8, 2022 and was recorded on August 22, 2022. The prior lender was Blackstone Group which held debt that had an original loan amount of $64.2 million. The seven properties have 272,518 square feet of built space and 15,876 square feet of additional air rights according to PincusCo analysis of city data. The loan price per built square foot is $223 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 signatory for A&E Real Estate Holdings was Darryl Smith. The signatory for Mesa West Capital was Raphael Fishbach.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 132-70 Sanford Avenue.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Maggie McCormick, head officer and Brian Garland, agent. The business entity is 132-70 Sanford Avenue Llc. The seven properties with a total of 272,518 square feet of built space generated revenue of $6.4 million per year or $24 per square foot.

The property

The 132-70 Sanford Avenue parcel has frontage of 100 feet and is 150 feet deep with a total lot size of 15,000 square feet. The zoning is R6 which allows for up to 2.43 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $5.6 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have received seven DOB violations, 90 housing violations, and $1,175 in OATH penalties in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $5 million on this tax lot.

The block

On the tax block of 132-70 Sanford Avenue, PincusCo has identified the owners of five of the 17 commercial properties representing 334,862 square feet of the 501,400 square feet. The largest owner is A&E Real Estate Holdings, followed by Pan Real Estate and then the City of New York.
There are no active new building construction projects on this tax block.

The majority, or 74 percent of the 497,135 square feet of built space are elevator buildings, with walkup buildings next occupying 20 percent of the space.

The borrower

The PincusCo database currently indicates that A&E Real Estate Holdings owned at least 162 commercial properties in New York City with 13,043,872 square feet and a city-determined market value of $1.5 billion. (Market value is typically about 50% of actual value.) The portfolio has $2 billion in debt, with top three lenders as Signature Bank, JPMorgan Chase, and Square Mile Capital Management respectively. Within the portfolio, the bulk, or 73 percent of the 13,043,872 square feet of built space are elevator properties, with walkup properties next occupying 26 percent of the space. The bulk, or 54 percent of the built space, is in Queens, with Manhattan next at 34 percent of the space.

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