Blackstone Group signs $26.8M refi for industrial in Castle Hill

Blackstone Group through the entity B9 Zerega Owner LLC as borrower signed a refi loan with lender Morgan Stanley, Bank of America, Barclays, Goldman Sachs, and JPMorgan Chase valued at $26.8 million for the industrial building (E9) at 537 Zerega Avenue in Castle Hill, Bronx.
The deal closed on November 8, 2024 and was recorded on November 19, 2024. The prior lender was Series 2020-VKNG which held debt that had an original loan amount of $23.3 million.
The property has 74,250 square feet of built space and 23,535 square feet of additional air rights for a total buildable of 98,066 square feet according to a PincusCo analysis of city data. The loan price per built square foot is $360 and the price per buildable square foot is $273 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 December 13, 2019, for $28.5 million. The signatory for Blackstone Group was Rebecca Levitan. The signatories for Morgan Stanley, Bank of America, Barclays, Goldman Sachs, and JPMorgan Chase were Cynthia Eckes, Steven Wasser, Adam Scotto, Siddharth Shrivastava, and Jessica Wong.

The property

The industrial building in Castle Hill has 74,250 square feet of built space and 23,535 square feet of additional air rights for a total buildable of 98,066 square feet according to a PincusCo analysis of city data. The parcel has frontage of 190 feet and is 509 feet deep with a total lot size of 98,066 square feet. The lot is irregular. The zoning is M1-1 which allows for up to 1 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $7.4 million. The most recent loan totaled $23.3 million and was provided by Citibank on September 29, 2020.

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 not received any significant violations in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on December 22, 2016. 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 Castle Hill, The bulk, or 48 percent of the 4.9 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 30 percent of the space. In sales, Castle Hill has the 35th highest sale turnover among other neighborhoods in Bronx with $21.2 million in sales volume in the last two years. For development, Castle Hill has had very little major development activity relative to other neighborhoods.It had 8,722 square feet of commercial and multi-family construction under development in the last two years, which represents 0.18 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of two of the three commercial properties representing 188,368 square feet of the 199,829 square feet. The two identified owners are Condal Distributors and Blackstone Group.
There are no active new building construction projects on this tax block.

The majority, or 57 percent of the 199,829 square feet of built space are mixed-use buildings, with industrial buildings next occupying 37 percent of the space.

The borrower

The PincusCo database currently indicates that Blackstone Group owned at least 41 commercial properties with 14,221 residential units in New York City with 16,940,379 square feet and a city-determined market value of $3.2 billion. (Market value is typically about 50% of actual value.) The portfolio has $1.6 billion in debt, with top three lenders as Morgan Stanley, Wells Fargo, and New York Life Insurance Company respectively. Within the portfolio, the bulk, or 90 percent of the 16,940,379 square feet of built space are elevator properties, with industrial properties next occupying 3 percent of the space. The bulk, or 84 percent of the built space, is in Manhattan, with Queens next at 12 percent of the space.

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