Brodsky, GFP, Sorgente sign $200M construction loan with Tyko for Flatiron conversion

Brodsky Organization, GFP Real Estate, and Sorgente Group through the entity Flatiron Owner LLC as borrower signed a rehab construction loan with lender Tyko Capital through the entity Flatiron Debt Lender LLC valued at $200 million for the conversion of the office building (O4) at 175 Fifth Avenue in Flatiron District, Manhattan, into a residential and retail condominium building.
The developers filed plans in early September 2024 to convert the building into 39 residential apartments and a retail space, according to a Department of City Planning application, 2024M0252.
The deal closed on October 21, 2024 and was recorded on November 1, 2024. The prior lender was Apple Bank which held debt that had an original loan amount of $60 million. The property has 183,449 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $1,090 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 October 25, 2023, for $6.7 million. The signatory for Brodsky Organization, GFP Real Estate, and Sorgente Group was J. Dean Amro. The signatory for Tyko Capital was Adi Chugh.

The property

The office building in Flatiron District has 183,449 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 197 feet and is 85 feet deep with a total lot size of 8,650 square feet. The lot is irregular. The property is in the Ladies’ Mile Historic District. The city-designated market value for the property in 2022 is $62.3 million. The most recent loan totaled $30 million and was provided by Apple Bank for Savings on November 20, 2023.

Violations and lawsuits

The property was involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $19 million money judgment concerning a contract filed on May 5, 2023, by Sorgente Group, GFP Real Estate, and ABS Real Estate Partners against Jacob Garlick and Abraham Trust. In addition, according to city public data, the property has received two DOB violations, $18,750 in ECB penalties, and $23,000 in OATH penalties in the last year.

Development

On the lot, there is one active major alteration construction project, M01011711, for a 185,897 square-foot 56 building. The project was submitted by Jon Adamski with plans filed March 20, 2024 and permitted August 12, 2024.

The neighborhood

In Flatiron District, The majority, or 71 percent of the 23.2 million square feet of commercial built space are office buildings, with elevator buildings next occupying 15 percent of the space. In sales, Flatiron District has 2.2 times the average sales volume among other neighborhoods with $541.9 million in sales volume in the last two years and is the 16th highest in Manhattan. For development, Flatiron District has 2.8 times the average amount of major developments relative to other neighborhoods and is the 10th highest in Manhattan. It had 3 million square feet of commercial and multi-family construction under development in the last two years, which represents 13 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 11 of the 16 commercial properties representing 645,786 square feet of the 711,717 square feet. The largest owner is SL Green Realty, followed by Sorgente Group and then Rockrose Development.
There are no active new building construction projects on this tax block.

The majority, or 95 percent of the 711,717 square feet of built space are office buildings, with retail buildings next occupying 3 percent of the space.

The borrower

The PincusCo database currently indicates that Brodsky Organization owned at least 43 commercial properties with 6,270 residential units in New York City with 5,824,465 square feet and a city-determined market value of $1.2 billion. (Market value is typically about 50% of actual value.) The portfolio has $786.1 million in debt, with top three lenders as Bank of New York Mellon, M&T Bank, and AXA Equitable respectively. Within the portfolio, the bulk, or 93 percent of the 5,824,465 square feet of built space are elevator properties, with office properties next occupying 3 percent of the space. The bulk, or 80 percent of the built space, is in Manhattan, with Brooklyn next at 20 percent of the space.
The PincusCo database currently indicates that GFP Real Estate owned at least 17 commercial properties with eight residential units in New York City with 4,955,947 square feet and a city-determined market value of $1.1 billion. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 98 percent of the 4,955,947 square feet of built space are office properties, with industrial properties next occupying 1 percent of the space. The bulk, or 98 percent of the built space, is in Manhattan, with Brooklyn next at 2 percent of the space.
The PincusCo database currently indicates that Sorgente Group owned at least one commercial property in New York City with 183,449 square feet and a city-determined market value of $62.3 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single office property. It is located in Manhattan.

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