Fairstead signs $38.8M refi loan with Merchants Capital on Upper West Side

Fairstead through the entity Park 79 Preservation Lp as borrower signed a refi loan with lender Merchants Capital through the entity Merchants Capital Corp. valued at $38.8 million for the affordable rental building (H3) at 117 West 79th Street in Upper West Side, Manhattan.
The deal closed on May 23, 2024 and was recorded on June 3, 2024. The prior lender was Freddie Mac which held debt that had an original loan amount of $51 million.
The property has 30,702 square feet of built space and 27,782 square feet of additional air rights for a total buildable of 58,490 square feet according to a PincusCo analysis of city data. The loan price per built square foot is $1,265 and the price per buildable square foot is $664 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 October 16, 2020, for $27.6 million. The signatory for Fairstead was Jeffrey Goldberg. The signatory for Merchants Capital was Bianca Geary.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Jennifer Lau, head officer and Heidy Lopez, agent. The business entities are Fairstead Management and Park 79 Preservation Lp.

The property

The hotel building in Upper West Side has 30,702 square feet of built space and 27,782 square feet of additional air rights for a total buildable of 58,490 square feet according to a PincusCo analysis of city data. The parcel has frontage of 57 feet and is 102 feet deep with a total lot size of 5,849 square feet. The lot is irregular. The zoning is R10A which allows for up to 10 times floor area ratio (FAR) for residential with inclusionary housing. The property is in the Upper West Side / Central Park West Historic District. The city-designated market value for the property in 2022 is $10 million. The most recent loan totaled $52.4 million and was provided by Merchants Capital on October 16, 2020.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received three DOB violations, 22 housing violations, $1,100 in OATH penalties, and one housing litigation in the last year.

Development

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 Upper West Side, The majority, or 59 percent of the 52.9 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 23 percent of the space. In sales, Upper West Side has the 7th highest sale turnover among other neighborhoods in the city with $1.2 billion in sales volume in the last two years. For development, Upper West Side has 2.6 times the average amount of major developments relative to other neighborhoods and is the 13th highest in Manhattan. It had 2.9 million square feet of commercial and multi-family construction under development in the last two years, which represents 5 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of eight of the 18 commercial properties representing 272,446 square feet of the 388,402 square feet. The largest owner is Steve Chen, followed by Sophia Magnone and then Pine Management.
There are no active new building construction projects on this tax block.

The majority, or 61 percent of the 388,402 square feet of built space are elevator buildings, with walkup buildings next occupying 27 percent of the space.

The borrower

The PincusCo database currently indicates that Fairstead owned at least 256 commercial properties with 7,219 residential units in New York City with 6,650,480 square feet and a city-determined market value of $802 million. (Market value is typically about 50% of actual value.) The portfolio has $529.1 million in debt, with top three lenders as NewPoint Real Estate Capital, Greystone & Co., and Capital One respectively. Within the portfolio, the bulk, or 71 percent of the 6,650,480 square feet of built space are elevator properties, with walkup properties next occupying 26 percent of the space. The bulk, or 36 percent of the built space, is in Brooklyn, with Manhattan next at 35 percent of the space.

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