Brause Realty signs $75M construction loan for 157-unit project in Murray Hill

Brause Realty through the entity New Second Avenue Owner LLC as borrower signed a new construction loan with lender JPMorgan Chase valued at $75 million for the 157-unit development project at 729 Second Avenue in Murray Hill, Manhattan.
The deal closed on February 6, 2024 and was recorded on February 13, 2024.

The signatory for Brause Realty was David A. Brause. This is a 128,983-square-foot, 157-unit residential (R-2) development project filed under job number M00672872. The project was submitted by David Brause with plans filed February 16, 2022 and permitted May 9, 2022. Brause Realty filed to demolish buildings on the site in August 2022.
This is JPMorgan Chase’s second New York City commercial construction loan above $5 million this year. It provided a total of $249 million in construction loans to five borrowers in 2023.

The property

The zoning is C1-9 which allows for up to 2 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $3.6 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 two DOB violations, $7,500 in ECB penalties, and $8,340 in OATH penalties in the last year.

The neighborhood

In Murray Hill, The majority, or 54 percent of the 11 million square feet of commercial built space are elevator buildings, with office buildings next occupying 22 percent of the space. In sales, Murray Hill has 3.4 times the average sales volume among other neighborhoods with $1 billion in sales volume in the last two years and is the 10th highest in Manhattan. For development, Murray Hill has had very little major development activity relative to other neighborhoods.It had 291,415 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 owners of nine of the 18 commercial properties representing 1,304,257 square feet of the 1,372,208 square feet. The largest owner is Pooya Toobian, followed by JP Morgan Asset Management and then Fisher Brothers.
On the tax block, there was one new building construction project submitted by David Brause with plans filed February 16, 2022 and permitted May 9, 2022.

The majority, or 66 percent of the 1.4 million square feet of built space are office buildings, with elevator buildings next occupying 29 percent of the space.

The borrower

The PincusCo database currently indicates that Brause Realty owned at least eight commercial properties with 279 residential units in New York City with 1,046,860 square feet and a city-determined market value of $225.6 million. (Market value is typically about 50% of actual value.) The portfolio has $50 million in debt, borrowed from Apple Bank for Savings and Minnesota Life Insurance Company. Within the portfolio, the bulk, or 72 percent of the 1,046,860 square feet of built space are office properties, with elevator properties next occupying 26 percent of the space. The bulk, or 83 percent of the built space, is in Queens, with Manhattan next at 17 percent of the space.

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