A&R Properties signs $12.5M construction loan with Valley National for 23-unit development in East Harlem

A&R Properties Group through the entity 1650 Madison Holdings LLC as borrower signed a new construction loan with lender Valley National Bank through the entity Valley National Bank valued at $12.5 million for the development building at 1650 Madison Avenue in East Harlem, Manhattan.
The deal closed on December 30, 2021 and was recorded on April 19, 2022. The prior lender was Valley National Bank which held debt that had an original loan amount of $2 million.The property has zero square feet of built space and 15,108 square feet of additional air rights for a total buildable of 15,108 square feet according to PincusCo analysis of city data. The loan price per buildable square foot is $827 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 owner bought the property on June 25, 2020, for $4 million. The signatory for A&R Properties Group was Noorollah Asherian and Shokrollah Rehanian.

The property

The 1650 Madison Avenue parcel has frontage of 43 feet and is 100 feet deep with a total lot size of 4,392 square feet. The zoning is R7-2 which allows for up to 3.44 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $1.9 million.

Violations and lawsuits

The property was not involved in any lawsuits or bankruptcies in the past years. In addition, according to city public data, the property has received $1,200 in OATH penalties in the last year.

Development

On these lots, there is one active new building construction project for a 23-unit, 27,575-square-foot R-2 building. The project was developed by Joshua Asherian with plans filed February 26, 2021 and permitted January 19, 2022.

The neighborhood

In East Harlem, the majority, or 51 percent of the 63.1 million square feet of commercial built space are residential elevator buildings, with specialty buildings next occupying 21 percent of the space. In sales, East Harlem has 2.1 times the average sales volume among other neighborhoods with $571.7 million in sales volume in the last two years and is the 22nd highest in Manhattan. For development, East Harlem is the 9th most active neighborhood among other neighborhoods. It had 4.3 million square feet of commercial and multi-family construction under development in the last two years, which represents 7 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of four of the 11 commercial properties representing 392,745 square feet of the 570,795 square feet. The largest owner is New York City Housing Authority, followed by Edward Ostad and then Noorollah Asherian. There is one active new building construction project totaling 27,575 square feet. It is a 23-unit, 27,575-square-foot R-2 building developed by Joshua Asherian with plans filed February 26, 2021 and permitted January 19, 2022.

The majority, or 91 percent of the 504,890 square feet of built space are residential elevator buildings, with residential walkup buildings next occupying 9 percent of the space.

The borrower

The PincusCo database currently indicates that A&R Properties Group owned at least three commercial properties with 46,201 square feet and a city-determined market value of $7.5 million. (Market value is typically about 50% of actual value.) The portfolio has $30 million in debt, borrowed from Valley National Bank and Arbor Realty Trust. Within the portfolio, the bulk, or 77 percent of the 46,201 square feet of built space are residential elevator properties, with development properties next occupying 23 percent of the space. They are all located in Queens.

Surrounding

Within a 400-foot radius of 1650 Madison Avenue, Pincusco identified eight commercial real estate items of interests occurred over the past 24 months.
Of those eight items, one was in new building development. It was a new building permit issued on March 10, 2021 for a 12,730-square-foot R-2 building with 14 residential units at 1661 Madison Avenue.
Of those eight items, one was for major renovation including a certificate of occupancy change. It was a permit issued on November 10, 2020 for the $731,500 renovation of 7,315-square-foot R-2 building with nine residential units at 53 East 110th Street.
Of those eight items, two were sales above $5 million totaling $345.5 million. The most recent of the two was Angela Gazivoda which bought the 20,905-square-foot, 30-unit rental (D1) on 19 East 109th Street for $5.5 million from Rettner Realty on July 13, 2021.
Of those eight items, four were loans above $5 million totaling $277.3 million. The most recent of the four was El Barrio Community Land Trust which borrowed $12.7 million from NYC Department of Housing Preservation and Development secured by the 1,071-square-foot, nine-unit rental (C7) on 53 East 110th Street and three other properties on December 8, 2020.

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