Extell cuts debt to $125M on refi with Helaba for 459-unit dev site in in Yorkville

Extell Development through the entity 350 East 86 LLC as borrower signed a refi loan with lender Helaba through the entity Landesbank Hessen-Thuringen Girozentrale valued at $125 million for two properties including the 14-unit residential walkup building at 1651 First Avenue in Yorkville, Manhattan and development building at 1637 First Avenue in Yorkville, Manhattan. Extell filed plans for a 459-unit, 471,953-square-foot residential building in November 2021 at 1637 First Avenue.
The deal closed on May 19, 2022 and was recorded on June 9, 2022. The prior lender was JVP Management which held debt that had an original loan amount of $145.2 million. The two properties have 12,000 square feet of built space and 28,760 square feet of additional air rights for a total buildable of 40,750 square feet according to PincusCo analysis of city data. The loan price per built square foot is $10,416 and the price per buildable square foot is $3,067 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 Extell Development was Marc Kwestel. The signatory for Helaba was Andrew A. Hastings and Robert W. Becker. The total senior debt was reduced from $145.2 million to $125 million.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 1651 First Avenue.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Marc Kwestel, head officer and Roman Andriyovych, officer. The business entity is First Ny Llc.

The property

The 1651 First Avenue parcel has frontage of 29 feet and is 75 feet deep with a total lot size of 2,200 square feet. The zoning is C2-8A 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 $5.9 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have received $50 in OATH penalties in the last year.

Development

On these lots, there is one active new building construction project for a 459-unit, 471,953-square-foot R-2 building. The project was developed by David Rothstein with plans filed November 17, 2021 and it has not been permitted yet.

The neighborhood

In Yorkville, the majority, or 71 percent of the 43.2 million square feet of commercial built space are residential elevator buildings, with residential walkup buildings next occupying 17 percent of the space. In sales, Yorkville has 1.4 times the average sales volume among other neighborhoods with $398.1 million in sales volume in the last two years and is the 23rd highest in Manhattan. For development, Yorkville has 1.7 times the average amount of major developments relative to other neighborhoods and is the 13th highest in Manhattan. It had 1.5 million square feet of commercial and multi-family construction under development in the last two years, which represents 4 percent of the neighborhood’s built space.

The block

On the tax block of 1651 First Avenue, PincusCo has identified the owners of 17 of the 38 commercial properties representing 180,528 square feet of the 348,175 square feet. The largest owner is Neil Sigety, followed by Marin Management and then Eberhart Brothers. There are four active new building construction projects totaling 719,476 square feet. The largest is a 459-unit, 471,953-square-foot R-2 building developed by David Rothstein with plans filed November 17, 2021 and it has not been permitted yet.The second largest is a 68-unit, 150,822-square-foot R-2 building developed by Modi Feibish with plans filed March 6, 2019 and permitted September 23, 2021.

The majority, or 45 percent of the 368,493 square feet of built space are residential walkup buildings, with residential elevator buildings next occupying 33 percent of the space.

The borrower

The PincusCo database currently indicates that Extell Development owned at least 80 commercial properties with 4,103,804 square feet and a city-determined market value of $1.1 billion. (Market value is typically about 50% of actual value.) The portfolio has $4.7 billion in debt, with top three lenders as Guggenheim Partners, Blackstone Group, and Prudential Credit Opportunities respectively. Within the portfolio, the bulk, or 31 percent of the 4,103,804 square feet of built space are rental condo properties, with specialty properties next occupying 27 percent of the space. The bulk, or 97 percent of the built space, is in Manhattan, with Brooklyn next at 3 percent of the space.

Surrounding

Within a 400-foot radius of 1651 First Avenue, Pincusco identified seven commercial real estate items of interests occurred over the past 24 months.
Of those seven items, one was for major renovation including a certificate of occupancy change. It was a permit application filed on November 8, 2021 for the $807,778 renovation of 39,634-square-foot RES building with 34 residential units at 355 East 86th Street.
One of those seven items was a sale which 355 East 86Th Street Lp bought the 36,237-square-foot, 45-unit rental (D7) on 1653 1st Avenue for $14.5 million from Bremen House Inc. on January 21, 2021.
Of those seven items, five were loans above $5 million totaling $73.1 million. The most recent of the five was James Glickson which borrowed $19 million from Principal Life Insurance Company secured by the 207,546-square-foot, 200-unit co-op (D4) on 1634 1st Avenue on April 11, 2022.

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