Blackstone Group signs $31.9M initial loan with Barclays for industrial in East New York

Blackstone Group through the entity B9 Alabama Ave Owner LLC as borrower signed an initial loan with lender Barclays through the entity Barclays Capital Real Estate Inc. valued at $31.9 million for the industrial building at 906 Wortman Avenue in East New York, Brooklyn.
The deal closed on March 11, 2022 and was recorded on March 25, 2022. The prior lender was Valley National Bank which held debt that had an original loan amount of $20 million given to the prior owner. The property has 112,800 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $283 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.)
Blackstone bought the property on December 7, 2021, for $35.5 million. The signatory for Blackstone Group was Mark Hudspeth.

Prior sales and revenue

The 112,800-square-foot property generated revenue of $1.5 million or $14 per square foot, according to the most recent income and expense figures.

The property

The 906 Wortman Avenue parcel has frontage of 200 feet and is 500 feet deep with a total lot size of 100,000 square feet. 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 $5.4 million.

Violations and lawsuits

The property was not involved in any lawsuits or bankruptcies in the past years. In addition, according to city public data, the property has received $16,124 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 neighborhood

In East New York, the bulk, or 31 percent of the 68.3 million square feet of commercial built space are 1-4 family buildings, with residential elevator buildings next occupying 26 percent of the space. In sales, East New York has the 4th highest sale turnover among other neighborhoods in the city with $2.1 billion in sales volume in the last two years. For development, East New York has 2.5 times the average amount of major developments relative to other neighborhoods and is the 8th highest in Brooklyn. It had 2.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owner of the one commercial property that spans that spans 112,800 square feet on the block. The identified owner is Blackstone Group. There are no active new building construction projects on this tax block.

All properties are industrial.

The borrower

The PincusCo database currently indicates that Blackstone Group owned at least 52 commercial properties with 15,777,295 square feet and a city-determined market value of $2.7 billion. (Market value is typically about 50% of actual value.) The portfolio has $825.2 million in debt, with top three lenders as Morgan Stanley, TIAA, and PNC Bank respectively. Within the portfolio, the bulk, or 91 percent of the 15,777,295 square feet of built space are residential elevator properties, with industrial properties next occupying 5 percent of the space. The bulk, or 80 percent of the built space, is in Manhattan, with Queens next at 16 percent of the space.

Surrounding

PincusCo has not identified any commercial real estate items of interest within a 400-foot radius of 906 Wortman Avenue that occurred over the past 24 months.

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