Douglaston signs $270.5M construction loan with MSD Partners for 72-unit project in Carnegie Hill

Douglaston Development through the entity 170 East 83rd Street Owner LLC as borrower signed a construction loan with lender MSD Partners through the entity Msd Rcof Partners XC, LLC valued at $270.5 million for two properties with 89 residential units including the 89-unit residential elevator building (D6) at 170 East 83rd Street and the development site just to the south at 175 East 82nd Street in Carnegie Hill, Manhattan.

On these lots, there is one active new building construction project for a 72-unit, 245,337 square-foot residential (R-2) building. The project was submitted by Douglaston Development and filed by Steven Charno with plans filed February 26, 2024.
At the same time, Douglaston Development paid $124.5 million to the 97-year-old company Valeray Real Estate for those parcels.
The sale and loan closed on June 5, 2024 and were recorded on June 7, 2024. The two properties have 147,534 square feet of built space and 109,952 square feet of additional air rights for a total buildable of 257,500 square feet according to a PincusCo analysis of city data. The loan price per built square foot is $1,833 and the price per buildable square foot is $1,050 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 Douglaston Development was Steve Charno.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Marjorie Nesbitt, head officer and Joseph Leone, officer. The business entity is 170 East 83rd Street, Llc. Out of the two properties, one with a total of 147,534 square feet of built space generated revenue of $5.2 million per year.

The property

The residential elevator building with 89 residential units in Carnegie Hill has 147,534 square feet of built space and 109,952 square feet of additional air rights for a total buildable of 257,500 square feet according to a PincusCo analysis of city data. The parcel has frontage of 204 feet and is 149 feet deep with a total lot size of 25,750 square feet. The lot is irregular. The zoning is C1-9 which allows for up to 2 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 $29.1 million. The most recent loan totaled $19 million and was provided by BankUnited on March 25, 2020.

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 $2,500 in ECB penalties, three housing violations, and $2,500 in OATH penalties in the last year.

The block

On the tax block of 170 East 83rd Street, PincusCo has identified the owners of six of the 14 commercial properties representing 239,050 square feet of the 331,112 square feet. The largest owner is Trans World Equities, followed by Sma Equities and then Marjorie E. Nesbitt.
On the tax block, there were two new building construction projects totaling 253,518 square feet. The largest is a 72-unit, 245,337 square-foot residential (R-2) building submitted by Douglaston Development and filed by Steven Charno with plans filed February 26, 2024 and it has not been permitted yet. The second largest is a one-unit, 8,181 square-foot residential (R-3) building submitted by Adam Sanders with plans filed July 15, 2016 and it has not been permitted yet.

The majority, or 68 percent of the 331,112 square feet of built space are elevator buildings, with walkup buildings next occupying 22 percent of the space.

The borrower

The PincusCo database currently indicates that Douglaston Development owned at least eight commercial properties with 2,188 residential units in New York City with 2,200,427 square feet and a city-determined market value of $588.8 million. (Market value is typically about 50% of actual value.) The portfolio has $188.8 million in debt, with top three lenders as NYC Housing Development Corporation, NYS Housing Finance Agency, and Metropolitan Commercial Bank respectively. Within the portfolio, the bulk, or 99 percent of the 2,200,427 square feet of built space are elevator properties, with retail properties next occupying 1 percent of the space. The bulk, or 51 percent of the built space, is in Brooklyn, with Manhattan next at 43 percent of the space.

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