Benderson Development signs $54M refi loan with Guggenheim for hotel in Garment District

Benderson Development through the entity Palmetto Hospitality Of Manhattan II, LLC as borrower signed a refi loan with lender Guggenheim Partners through the entity Guggenheim Real Estate, LLC valued at $54 million for the hotel building (H2) at 220 West 41st Street in Garment District, Manhattan.
The deal closed on August 15, 2024 and was recorded on August 21, 2024. The prior lender was Bank of America which held debt that had an original loan amount of $70 million.

The property has 141,335 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $382 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 August 20, 2015, for $80.9 million. The signatory for Benderson Development was Jason C. Lynch. The signatory for Guggenheim Partners was Jennifer A. Marler.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Charles King, head officer and Palmetto Hospitality Fund VI, LLC, shareholder. The business entities are Hampton Inn Manhattan Times Square and Palmetto Hosptialty Of Manhattan Ii, Llc.

The property

The hotel building in Garment District has 141,335 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 84 feet and is 98 feet deep with a total lot size of 8,295 square feet. The zoning is C6-6.5 which allows for up to 12 times floor area ratio (FAR) for commercial The city-designated market value for the property in 2022 is $40.4 million.

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 $375 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on June 25, 2015. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Garment District, The majority, or 69 percent of the 52.3 million square feet of commercial built space are office buildings, with hotel buildings next occupying 13 percent of the space. In sales, Garment District has 2 times the average sales volume among other neighborhoods with $532.7 million in sales volume in the last two years and is the 16th highest in Manhattan. For development, Garment District is the 4th most active neighborhood among other neighborhoods. It had 7.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 14 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of five of the nine commercial properties representing 671,736 square feet of the 755,385 square feet. The largest owner is Research Foundation Of The City University Of New York, followed by Benderson Development and then Corten Real Estate Partners.
On the tax block, there was one new building construction project filed totaling 118,143 square feet. It is a 167-unit, 118,143 square-foot hotel/dormitory/shelter (R-1) building submitted by Soho Properties and filed by Sharif El-Gamal with plans filed March 24, 2015 and permitted January 17, 2019.

The majority, or 53 percent of the 755,385 square feet of built space are office buildings, with hotel buildings next occupying 41 percent of the space.

The borrower

The PincusCo database currently indicates that Benderson Development owned at least one commercial property in New York City with 141,335 square feet and a city-determined market value of $40.4 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single hotel property. It is located in Manhattan.

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