Black Spruce signs $189.4M refi with Signature Bank for 48 properties in Manhattan

Black Spruce Management through the entity 109th Affordable Housing LLC as borrower signed a refi loan with lender Signature Bank through the entity Signature Bank valued at $189.4 million for 48 properties including the midblock 25-unit residential walkup building at 233 West 109th Street in Upper West Side, Manhattan, midblock 25-unit residential walkup building at 223 West 109th Street in Upper West Side, Manhattan, and midblock 20-unit residential walkup building at 229 West 115th Street in Harlem, Manhattan.
The deal closed on April 14, 2022 and was recorded on May 3, 2022. The 48 properties have 503,565 square feet of built space and 71,744 square feet of additional air rights for a total buildable of 571,949 square feet according to PincusCo analysis of city data. The loan price per built square foot is $376 and the price per buildable square foot is $331 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 Black Spruce Management was Joshua Gotlib. The signatory for Signature Bank was Samantha Stewart. This is a cross-collateralization agreement.

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 223 West 109th Street.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Joshua Gotlib, head officer and Thomas Barrett, site manager. The business entities are Nieuw Amsterdam Property Management and 109th Affordable Housing Llc. Out of the 48 properties, 38 with a total of 503,565 square feet of built space generated revenue of $15.3 million per year.

The property

The 223 West 109th Street parcel has frontage of 44 feet and is 100 feet deep with a total lot size of 4,474 square feet. The zoning is R8B which allows for up to 4 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $4.9 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 one DOB violation, 457 housing violations, $7,525 in OATH penalties, and four housing litigations 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 neighborhood

In Upper West Side, the majority, or 68 percent of the 95.5 million square feet of commercial built space are residential elevator buildings, with residential walkup buildings next occupying 13 percent of the space. In sales, Upper West Side has the 8th highest sale turnover among other neighborhoods in the city with $1.5 billion in sales volume in the last two years. For development, Upper West Side has 1.9 times the average amount of major developments relative to other neighborhoods and is the 11th highest in Manhattan. It had 1.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 2 percent of the neighborhood’s built space.

The block

On the tax block of 223 West 109th Street, PincusCo has identified the owners of 16 of the 21 commercial properties representing 354,765 square feet of the 467,545 square feet. The largest owner is Columbia University, followed by Black Spruce Management and then Michael Daniel. There are no active new building construction projects on this tax block.

The majority, or 34 percent of the 526,804 square feet of built space are residential walkup buildings, with specialty buildings next occupying 34 percent of the space.

The borrower

The PincusCo database currently indicates that Black Spruce Management owned at least 102 commercial properties with 2,078,476 square feet and a city-determined market value of $362.1 million. (Market value is typically about 50% of actual value.) The portfolio has $281.4 million in debt, with top three lenders as Signature Bank, New York Community Bank, and Amerant Bank respectively. Within the portfolio, the bulk, or 58 percent of the 2,078,476 square feet of built space are residential elevator properties, with residential walkup properties next occupying 40 percent of the space. The bulk, or 80 percent of the built space, is in Manhattan, with Queens next at 19 percent of the space.

Surrounding

Within a 400-foot radius of 223 West 109th Street, PincusCo identified 12 commercial real estate items of interests occurred over the past 24 months.
Of those 12 items, one was for major renovation including a certificate of occupancy change. It was a permit application filed on November 2, 2020 for the $320,000 renovation of 13,401-square-foot R-2 building with 17 residential units at 218 West 108th Street.
Of those 12 items, nine were sales above $5 million totaling $99.7 million. The most recent of the nine was Salvatore Vona which bought the 17,635-square-foot, 21-unit rental (C1) on 211 West 108th Street for $5 million from Jerold S. Yale on July 8, 2021.
Of those 12 items, two were loans above $5 million totaling $46.5 million. The most recent of the two was Joseph Franco which borrowed $17 million from Apple Bank for Savings secured by the 17,710-square-foot, 21-unit rental (C1) on 215 West 108th Street and seven other properties on February 16, 2021.

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