Elk Investments signs $15M initial loan with Wells Fargo for office in Garment District

Elk Investments through the entity Central Properties Owner LLC as borrower signed a initial loan with lender Wells Fargo valued at $15 million for the midblock office building at 341 West 38th Street in the Garment District, Manhattan.
The deal closed on March 21, 2022 and was recorded on March 29, 2022. The property has 54,935 square feet of built space and 19,107 square feet of additional air rights for a total buildable of 74,060 square feet according to PincusCo analysis of city data. The loan price per built square foot is $273 and the price per buildable square foot is $202 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 Elk Investments was Erik Kalimian.

The property

The 341 West 38th Street parcel has frontage of 50 feet and is 98 feet deep with a total lot size of 7,406 square feet. The city-designated market value for the property in 2022 is $9.6 million.

Violations and lawsuits

The property was not involved in any lawsuits or bankruptcies in the past years. In addition, according to city public data, the property has received one DOB violation and $1,250 in OATH penalties in the last year.

Development

On these lots, there is one active major alteration construction project for a 279,069-square-foot B building. The project was developed by Eric Kalimian with plans filed August 23, 2018 and it has not been permitted yet.

The neighborhood

In Garment District, the majority, or 69 percent of the 53 million square feet of commercial built space are office buildings, with hotel buildings next occupying 12 percent of the space. In sales, Garment District has 4.1 times the average sales volume among other neighborhoods with $1.1 billion in sales volume in the last two years and is the 9th highest in Manhattan. For development, Garment District has had very little major development activity relative to other neighborhoods.It had 561,900 square feet of commercial and multi-family construction under development in the last two years, which represents 1 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other office buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of eight of the 26 commercial properties representing 444,857 square feet of the 1,817,809 square feet. The largest owner is Magna Hospitality Group, followed by Ivy Realty and then Falcon Properties.

The majority, or 50 percent of the 1.9 million square feet of built space are office buildings, with hotel buildings next occupying 29 percent of the space.

Surrounding

Within a 400-foot radius of 341 West 38th Street, PincusCo identified 17 commercial real estate items of interests occurred over the past 24 months.
Of those 17 items, five were sales above $5 million totaling $528.4 million. The most recent of the five was Haitau Bian which bought six condo units in the 1,525-square-foot, 10-unit mixed-use building (RM) on 355 West 39th Street and four other properties for $7 million from Man Hei Li on January 21, 2022.
Of those 17 items, 12 were loans above $5 million totaling $858 million. The most recent of the 12 was Gehr Group which borrowed $54.5 million from Guardian Life Insurance Company of America secured by the 98,738-square-foot, 248-unit hotel (H2) on 326 West 40th Street on February 16, 2022.

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