Black Spruce, Orbach pay $631M to Solow for three rentals with 623 units in Lenox Hill

Black Spruce Management and Orbach Affordable Housing Solutions paid $631 million to Solow Realty & Development for three rental buildings in Lenox Hill with a total of 623 units. This is part of a previously reported portfolio sale between the parties.

In the larger of the new deals, Black Spruce Management and Orbach Affordable Housing Solutions through the entity 1 East River LLC paid $410 million to Solow Realty & Development through the entity One East River Place Realty Company II LLC for the 414-unit residential elevator building (D8) at 530 East 73rd Street in Lenox Hill, Manhattan and the garage building (G1) at 523 East 72nd Street in Lenox Hill, Manhattan.
The deal closed on November 23, 2022 and was recorded on December 7, 2022. The two properties have 598,449 square feet of built space and 67,913 square feet of additional air rights according to PincusCo analysis of city data. The sale price per built square foot is $685 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 Solow Realty & Development was Steven Weymouth. The signatory for Black Spruce Management and Orbach Affordable Housing Solutions was Joshua Gotlib. Along with the sale, Gotlib and Meyer Orbach’s companies assumed a $186.5 million loan originated by Walker & Dunlop which was then securitized as 2020-K740 and 2021-K741, and they also replaced the late Sheldon Solow as the guarantors. Solow’s son, Stefan Soloviev, who now leads the reduced holdings of Solow Realty & Development, signed the assignment of guarantor for the seller entity.

In the second transaction, Black Spruce Management and Orbach Affordable Housing Solutions through the entity 2 Sutton Place N LLC paid $221.3 million to Solow Realty & Development through the entity 1113 York Ave Realty Company II, L.L.C. for the 209-unit residential elevator building (D8) at 1113 York Avenue in Lenox Hill, Manhattan.
The deal closed on November 23, 2022 and was recorded on December 7, 2022. The property has 283,848 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $779 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 Solow Realty & Development was Steven Weymouth. The signatory for Black Spruce Management and Orbach Affordable Housing Solutions was Joshua Gotlib. Along with the sale, Gotlib and Orbach assumed a $153,973,000 loan securitized as 2017-K729 and replaced the late Sheldon Solow as the guarantors.

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 530 East 73rd Street.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Black Spruce Management purchased 21 properties in 16 transactions for a total of $1.1 billion and has no record it sold any properties over the past 24 months.
The seller Solow Realty & Development had not purchased any other properties and sold three properties in one transactions for a total of $387.5 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes Anthony Calicchio, head officer and Anthony Brucia, site manager. The business entities are Solow Management Corp and One East River Place Realty Company Ii, Llc. Out of the two properties, one with a total of 598,449 square feet of built space generated revenue of $26.8 million per year.

The property

The 530 East 73rd Street parcel has frontage of 120 feet and is 209 feet deep with a total lot size of 28,397 square feet. The lot is irregular. The zoning is R10 which allows for up to 10 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $132.3 million. The most recent loan totaled $186.5 million and was provided by Walker & Dunlop on August 31, 2020.

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 two housing violations and $2,000 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 530 East 73rd Street, PincusCo has identified the owners of six of the 14 commercial properties representing 670,173 square feet of the 919,520 square feet. The largest owner is Solow Realty & Development, followed by Hospital for Special Surgery and then Anthony Ventura.
There are no active new building construction projects on this tax block.

The majority, or 77 percent of the 849,379 square feet of built space are elevator buildings, with office buildings next occupying 13 percent of the space.

The seller

The PincusCo database currently indicates that Solow Realty & Development owned at least seven commercial properties in New York City with 3,333,923 square feet and a city-determined market value of $1.6 billion. (Market value is typically about 50% of actual value.) The portfolio has $505.9 million in debt, borrowed from Walker & Dunlop. Within the portfolio, the bulk, or 52 percent of the 3,333,923 square feet of built space are office properties, with elevator properties next occupying 48 percent of the space. They are all located in Manhattan.

The buyer

The PincusCo database currently indicates that Black Spruce Management owned at least 142 commercial properties in New York City with 3,431,440 square feet and a city-determined market value of $713.4 million. (Market value is typically about 50% of actual value.) The portfolio has $434.7 million in debt, with top three lenders as Signature Bank, Amerant Bank, and New York Community Bank respectively. Within the portfolio, the bulk, or 64 percent of the 3,431,440 square feet of built space are elevator properties, with walkup properties next occupying 36 percent of the space. The bulk, or 81 percent of the built space, is in Manhattan, with Queens next at 15 percent of the space.

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