Brookfield turns over $216.1M Brill Building to lender Mack Real Estate

Mack Real Estate Group through the entity CMTG Lender 33 LLC acquired the retail and office Brill Building (O6) at 1619 Broadway in Midtown West, Manhattan from Brookfield Asset Management through the entity 1619 Broadway Mezz LLC. The city valued the transfer at $216.1 million.
The deal closed on June 30, 2023 and was recorded on July 13, 2023. The property has 158,150 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $1,366 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.)
Brookfield acquired the property on March 17, 2017, through a UCC foreclosure, with the transfer valued $213.2 million.

Brookfield Asset Management took control of the Brill Building in 2017 through a foreclosure of a $50 million mezzanine loan. The prior owners were a joint venture of Allied Partners, Brickman & Associates, the Israeli pension fund Halman-Aldubi and New York’s Conway Capital, according to the New York Post which reported on the 2017 transaction.

Bank OZK sold the debt in 2019, then amounting to $144.9 million, to Mack Real Estate Group. This is an entity level transfer, not a deed transfer. The parties paid $10.6 million in transfer taxes.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Mack Real Estate Group had purchased any other properties and has no record it sold any properties over the past 24 months.

Brookfield Properties, an affiliate of Brookfield Asset Management, purchased 15 properties in 10 transactions for a total of $964.3 million and sold nine properties in six transactions for a total of $737.5 million over the same time period. The 158,150-square-foot property generated revenue of $12.2 million or $77 per square foot, according to the most recent income and expense figures.

The property

The retail and office building in Midtown West has 158,150 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 125 feet and is 112 feet deep with a total lot size of 13,050 square feet. The lot is irregular. The zoning is C6-7T which allows for up to 14 times floor area ratio (FAR) for commercial The property is in the Individual Landmark. The city-designated market value for the property in 2022 is $55.2 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 $8,900 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 $1 million on this tax lot.

The neighborhood

In Midtown West, The majority, or 75 percent of the 75.9 million square feet of commercial built space are office buildings, with hotel buildings next occupying 14 percent of the space. In sales, Midtown West has the 7th highest sale turnover among other neighborhoods in the city with $2.2 billion in sales volume in the last two years. For development, Midtown West is the most active neighborhood among other neighborhoods. It had 19 million square feet of commercial and multi-family construction under development in the last two years, which represents 25 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of four of the 14 commercial properties representing 701,711 square feet of the 1,554,771 square feet. The largest owner is United American Land, followed by Thomas Burke and then Brack Capital Real Estate.
There are no active new building construction projects on this tax block.

The majority, or 37 percent of the 1.6 million square feet of built space are elevator buildings, with office buildings next occupying 37 percent of the space.

The seller

The PincusCo database currently indicates that Brookfield Properties owned at least 57 commercial properties with 4,356 residential units in New York City with 25,030,096 square feet and a city-determined market value of $5.7 billion. (Market value is typically about 50% of actual value.) The portfolio has $10.5 billion in debt, with top three lenders as Wells Fargo, JPMorgan Chase, and ING Capital respectively. Within the portfolio, the bulk, or 60 percent of the 25,030,096 square feet of built space are office properties, with elevator properties next occupying 20 percent of the space. The bulk, or 72 percent of the built space, is in Manhattan, with Brooklyn next at 21 percent of the space.
The PincusCo database currently indicates that Brookfield Asset Management owned at least three commercial properties with 816 residential units in New York City with 942,458 square feet and a city-determined market value of $52.1 million. (Market value is typically about 50% of actual value.) Within the portfolio, all identified are elevator properties. They are all located in Brooklyn.

The buyer

The PincusCo database currently indicates that Mack Real Estate Group owned at least 15 commercial properties with 270 residential units in New York City with 995,723 square feet and a city-determined market value of $242.3 million. (Market value is typically about 50% of actual value.) The portfolio has $309.8 million in debt, borrowed from UBSCM 2018-NYCH and JPMorgan Chase. Within the portfolio, the bulk, or 38 percent of the 995,723 square feet of built space are hotel properties, with industrial properties next occupying 34 percent of the space. The bulk, or 38 percent of the built space, is in Manhattan, with Queens next at 34 percent of the space.

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