Carlyle, Sabharwal sign $28M refi for industrial in Red Hook, Brownsville

Carlyle Group and Sabharwal Properties through the entity 507 Osborn Street Owner, L.L.C. as borrower signed a refi loan with lender Prudential Financial through the entity The Prudential Insurance Company of America valued at $28 million for two industrial properties including the industrial building (E7) at 155 King Street in Red Hook, Brooklyn and industrial building (E7) at 507 Osborn Street in Brownsville, Brooklyn.
The deal closed on June 7, 2024 and was recorded on June 13, 2024. The prior lender was Santander Bank which held debt that had an original loan amount of $17.9 million.

‘The two properties have 133,258 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $210 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 signatory for Carlyle Group and Sabharwal Properties was Carlyle managing director Wonjoong Kim. The signatory for Prudential Financial was Trevor Arnholt. Wonjoong Kim is a managing director at Carlyle Group.  Carlyle and Sabharwal recently refinanced another industrial asset with a $71 million loan.

The property

The industrial building in Red Hook has 133,258 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 150 feet and is 200 feet deep with a total lot size of 23,999 square feet. The lot is irregular. The zoning is M2-1 which allows for up to 2 times floor area ratio (FAR) for manufacturing. The city-designated market value for the property in 2022 is $14.2 million. The most recent loan totaled $17.9 million and was provided by Santander Bank on December 3, 2019.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties for the past 24 months. In addition, according to city public data, the properties have received four DOB violations and $50 in OATH penalties in the last year.

Development

For the tax lot buildings, two out of the two buildings received a initial certificate of occupancy in the last ten years. 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 Red Hook, The bulk, or 49 percent of the 9.4 million square feet of commercial built space are industrial buildings, with elevator buildings next occupying 30 percent of the space. In sales, Red Hook has 1.9 times the average sales volume among other neighborhoods with $524.3 million in sales volume in the last two years and is the 13th highest in Brooklyn. For development, Red Hook has had very little major development activity relative to other neighborhoods.It had 924,094 square feet of commercial and multi-family construction under development in the last two years, which represents 10 percent of the neighborhood’s built space.

The block

On the tax block of 155 King Street, PincusCo has identified the owners of three of the 14 commercial properties representing 84,075 square feet of the 112,428 square feet. The two identified owners are Carlyle Group and Annette Amendola As Trustee.
On the tax block, there were two new building construction projects totaling 6,308 square feet. The largest is a five-unit, 5,080 square-foot residential (R-2) building submitted by Lee Cohen with plans filed October 7, 2020 and it has not been permitted yet. The second largest is a one-unit, 1,228 square-foot residential (R-3) building submitted by Eric Veksler with plans filed May 29, 2020 and permitted February 12, 2024.

The majority, or 77 percent of the 112,428 square feet of built space are industrial buildings, with walkup buildings next occupying 12 percent of the space.

The borrower

The PincusCo database currently indicates that Carlyle Group owned at least 308 commercial properties with 2,808 residential units in New York City with 3,813,099 square feet and a city-determined market value of $896.8 million. (Market value is typically about 50% of actual value.) The portfolio has $600 million in debt, with top three lenders as Invesco, Prudential Financial, and Santander Bank respectively. Within the portfolio, the bulk, or 40 percent of the 3,813,099 square feet of built space are elevator properties, with industrial properties next occupying 26 percent of the space. The bulk, or 45 percent of the built space, is in Brooklyn, with Queens next at 33 percent of the space.

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