Blackstone Group signs $308.5M refi for office in Midtown East, down from $452M
Blackstone Group through the entity BRE Park Avenue Tower Owner LLC as borrower signed a refi loan with lender Morgan Stanley through the entity Morgan Stanley Bank valued at $308.5 million for the office building (O4) at 65 East 55th Street in Midtown East, Manhattan.
The deal closed on March 7, 2024 and was recorded on March 14, 2024. The prior lender was Morgan Stanley which held debt that had an original loan amount of $452 million. The property has 528,552 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $583 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 Blackstone Group was Rebecca Levitan. The signatory for Morgan Stanley was Jane Lam.
The property
The office building in Midtown East has 528,552 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 143 feet and is 200 feet deep with a total lot size of 30,966 square feet. The lot is irregular. The zoning is C5-2.5 which allows for up to 12 times floor area ratio (FAR) for commercial. The city-designated market value for the property in 2022 is $229.2 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 $650 in OATH penalties in the last year.
Development
For the tax lot building, it received its initial certificate of occupancy on December 14, 2017. On the lot, there are two active new building construction projects and major alteration projects with initial costs more than $5 million, totaling zero square feet. The largest is a major alteration project for a 528,542 square-foot B building submitted by Antoinette Polanco with plans filed December 8, 2015 and permitted May 27, 2016. The second largest is a major alteration project for a 528,542 square-foot B building submitted by Jeff Young with plans filed June 18, 2018 and permitted October 24, 2018.
The neighborhood
In Midtown East, The majority, or 81 percent of the 62.6 million square feet of commercial built space are office buildings, with hotel buildings next occupying 7 percent of the space. In sales, Midtown East has the 2nd highest sale turnover among other neighborhoods in the city with $3.8 billion in sales volume in the last two years. For development, Midtown East is the 2nd most active neighborhood among other neighborhoods. It had 14.7 million square feet of commercial and multi-family construction under development in the last two years, which represents 24 percent of the neighborhood’s built space.
The block
On this tax block, PincusCo has identified the owners of five of the eight commercial properties representing 1,360,485 square feet of the 2,316,136 square feet. The largest owner is Olayan Group, followed by Oestreicher Properties and then Lexin Capital.
There are no active new building construction projects on this tax block.
The majority, or 100 percent of the 2.3 million square feet of built space are office buildings, with mixed-use buildings next occupying 0 percent of the space.
The borrower
The PincusCo database currently indicates that Blackstone Group owned at least 60 commercial properties with 14,221 residential units in New York City with 16,910,586 square feet and a city-determined market value of $3 billion. (Market value is typically about 50% of actual value.) The portfolio has $1.3 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 16,910,586 square feet of built space are elevator properties, with industrial properties next occupying 6 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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