Cain International acquires $180.8M debt secured by InterVest’s UWS condo project, part of $500M loan portfolio

Cain International through the entity Cain International Agent Limited bought a note with an original principal of $180.8 million from Pacific Western Bank secured by InterVest Capital Partners’ 16-story residential building at 720 West End Avenue in Upper West Side, Manhattan.

The note was part of Cain International and Security Benefit Life Insurance Company’s purchase of PacWest’s $500 million New York City construction loan portfolio, composed of 10 projects.
The deal closed on June 8, 2023 and was recorded on June 15, 2023. The prior lender was Pacific Western Bank which held debt that had an original loan amount of $180.8 million.
The property has 237,507 square feet of built space according to a PincusCo analysis of city data.

The owner bought the property on December 22, 2021, for $168 million. InterVest Capital Partners, formerly known as Wafra Capital Partners, is an affiliate of Kuwait’s sovereign wealth fund. Pacific Western provided the $180 million senior debt and Related Companies provided a $45 million mezzanine loan at the time of the purchase, the Commercial Observer reported at the time. InterVest filed plans in November 2022 to convert the property to a 132-unit residential condominium, according to reports.

The property

The specialty building in Upper West Side has 237,507 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 175 feet and is 125 feet deep with a total lot size of 20,149 square feet. The lot is irregular. The zoning is R10A which allows for up to 10 times floor area ratio (FAR) for residential with inclusionary housing. The property is in the Riverside-West End Historic District Extension II. The city-designated market value for the property in 2022 is $28.6 million. The most recent loan totaled $180.8 million and was provided by Pacific Western Bank on December 22, 2021.

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 five DOB violations, $8,750 in ECB penalties, and $10,750 in OATH penalties in the last year.

Development

On the lot, there is one active major alteration construction project for a 117-unit, 219,768 square-foot R-2 building. The project was submitted by Doron Resheff with plans filed July 6, 2018 and it has not been permitted yet. On the tax lot, the most recent condominium plan was filed by 720 WEA VENTURES LLC to create 132 residential units in a building at 720 West End Avenue in Upper West Side, Manhattan, called 720 West End Avenue Condominium, according to an November 29, 2022 submission to the New York State Attorney General. The principal of the sponsor, 720 WEA Ventures LLC, was Michael Gontar.

The neighborhood

In Upper West Side, The majority, or 59 percent of the 52.9 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 23 percent of the space. In sales, Upper West Side has the 7th highest sale turnover among other neighborhoods in the city with $2.3 billion in sales volume in the last two years. For development, Upper West Side has 2.7 times the average amount of major developments relative to other neighborhoods and is the 12th highest in Manhattan. It had 2.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 5 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 10 of the 21 commercial properties representing 127,269 square feet of the 496,030 square feet. The largest owner is Time Equities, followed by Shahram John Gatan and then Schreiber Properties.
On the tax block, there were two new building construction projects totaling 356,881 square feet. The largest is a 130-unit, 232,290 square-foot residential (R-2) building submitted by JVP Management and filed by John Illuzzi with plans filed January 27, 2020 and permitted June 8, 2020. The second largest is a 171-unit, 124,591 square-foot residential (R-2) building submitted by Fetner Properties and filed by Hal Fetner with plans filed March 16, 2021 and permitted June 16, 2022.

The majority, or 76 percent of the 496,030 square feet of built space are elevator buildings, with walkup buildings next occupying 19 percent of the space.

The borrower

The PincusCo database currently indicates that Intervest Capital Partners owned at least 14 commercial properties with 504 residential units in New York City with 497,824 square feet and a city-determined market value of $28 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 52 percent of the 497,824 square feet of built space are elevator properties, with walkup properties next occupying 48 percent of the space. They are all located in Bronx.

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