Dermot Company signs $120M refi loan with Helaba for 375-unit rental in Hell’s Kitchen

Dermot Company through the entity 520 West 43rd Street Reit, LLC as borrower signed a refi loan with lender Helaba through the entity Landesbank Hessen-Thuringen Girozentrale valued at $120 million for the 375-unit residential elevator building (D6) at 520 West 43rd Street in Hell’s Kitchen, Manhattan.
The deal closed on July 29, 2022 and was recorded on August 10, 2022. The prior lender was HSBC Bank which held debt that had an original loan amount of $120 million. The property has 319,967 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $375 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 August 1, 2018, for $193 million. The signatory for Dermot Company was Spencer Hodes.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Stephen Benjamin, head officer and Andrew Levison, officer. The business entities are Dermot Realty Management Co. Lp. and 520 West 43rd Street Reit Llc. The 319,967-square-foot property generated revenue of $14.9 million or $46 per square foot, according to the most recent income and expense figures.

The property

The 520 West 43rd Street parcel has frontage of 166 feet and is 200 feet deep with a total lot size of 24,269 square feet. The zoning is C6-4 which allows for up to 10 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 $82.5 million.

Violations and lawsuits

The property was involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $2.7 million money judgment concerning a construction filed on December 11, 2021, by Skanska against New York City School Construction Authority. In addition, according to city public data, the property has received one DOB violation and $250 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on May 7, 2015. There are no active new building construction projects or major alteration projects with initial costs more than $5 million on this tax lot.

The block

There is one active new building construction project totaling 280,037 square feet. It is a 350-unit, 280,037-square-foot R-2 building developed by Richard Born with plans filed August 12, 2016 and it has not been permitted yet.

The majority, or 86 percent of the 974,185 square feet of built space are elevator buildings, with hotel buildings next occupying 13 percent of the space.

The borrower

The PincusCo database currently indicates that Dermot Company owned at least 27 commercial properties in New York City with 3,650,423 square feet and a city-determined market value of $1 billion. (Market value is typically about 50% of actual value.) The portfolio has $317 million in debt, with top three lenders as Helaba, Signature Bank, and Capital One respectively. Within the portfolio, the bulk, or 54 percent of the 3,650,423 square feet of built space are elevator properties, with rental condo properties next occupying 35 percent of the space. The bulk, or 64 percent of the built space, is in Manhattan, with Brooklyn next at 26 percent of the space.

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