Fortuna Realty, Kalimian Equities sign $116M refi with Goldman Sachs for hotel in Grand Central

Fortuna Realty Group and Kalimian Equities through the entity 26 West 39th LLC as borrower signed a refi loan with lender Goldman Sachs through the entity Goldman Sachs Bank USA valued at $116 million for the hotel building (H2) at 19 West 38th Street in Grand Central, Manhattan.
The deal closed on August 24, 2022 and was recorded on August 31, 2022. The prior lender was Goldman Sachs which held debt that had an original loan amount of $112 million.The property has 133,564 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $868 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 16, 2016, for $8 million. The signatory for Fortuna Realty Group and Kalimian Equities was Morris Moinian and Morad Kalimian.

The property

The 19 West 38th Street parcel has frontage of 25 feet and is 197 feet deep with a total lot size of 11,159 square feet. The lot is irregular. The zoning is M1-6 which allows for up to 10 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $33.8 million. The most recent loan totaled $112 million and was provided by Goldman Sachs on November 3, 2020.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property since September of 2020. In addition, according to city public data, the property has received $6,300 in ECB penalties and $7,500 in OATH penalties in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $5 million on this tax lot.

The neighborhood

In Grand Central, the majority, or 80 percent of the 43.9 million square feet of commercial built space are office buildings, with hotel buildings next occupying 8 percent of the space. In sales, Grand Central has 2.6 times the average sales volume among other neighborhoods with $875.4 million in sales volume in the last two years and is the 17th highest in Manhattan. For development, Grand Central has 2.1 times the average amount of major developments relative to other neighborhoods and is the 14th highest in Manhattan. It had 2.2 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 10 of the 43 commercial properties representing 1,198,292 square feet of the 2,026,363 square feet. The largest owner is Amazon, followed by Weihong Hu and then Fortuna Realty Group.
There are three active new building construction projects totaling 129,337 square feet. The largest is a 173-unit, 62,062-square-foot R-1 building developed by Wei Hong Hu with plans filed April 20, 2018 and permitted July 24, 2018. The second largest is a 176-unit, 56,117-square-foot R-1 building developed by Morris Moinian with plans filed September 5, 2013 and permitted May 25, 2017.

the majority, or 42 percent of the 1.9 million square feet of built space are retail buildings, with office buildings next occupying 34 percent of the space.

The borrower

The PincusCo database currently indicates that Fortuna Realty Group owned at least two commercial properties in New York City with 193,284 square feet and a city-determined market value of $55.4 million. (Market value is typically about 50% of actual value.) The portfolio has $219 million in debt, borrowed from Goldman Sachs and Prime Finance Partners. Within the portfolio, all identified are hotel properties. They are all located in Manhattan.

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