GDSNY signs $90M construction loan for office building in NoMad

GDSNY through the entity 1241 Broadway LLC as borrower signed a construction loan with lender Deutsche Pfandbriefbank valued at $90 million for the office building (O4) at 1245 Broadway in NoMad, Manhattan.
On the lot, there is one active new building construction project for a 140,834 square-foot office (B) building. The project was developed by GDSNY with plans filed August 7, 2018 and permitted June 12, 2019.
The deal closed on March 10, 2023 and was recorded on March 21, 2023. The property has 178,884 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $503 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 GDS Development was Michael Kirchmann. GDSNY is also known as GDS Development.

The property

The 1241 Broadway parcel has frontage of 106 feet and is 132 feet deep with a total lot size of 12,755 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 $20.6 million.

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 $10,000 in ECB penalties and $10,000 in OATH penalties in the last year.

The neighborhood

In Penn Station, the majority, or 71 percent of the 21.7 million square feet of commercial built space are office buildings, with specialty buildings next occupying 8 percent of the space. In sales, Penn Station has the 40th highest sale turnover among other neighborhoods in Manhattan with $56.8 million in sales volume in the last two years. For development, Penn Station has 2.8 times the average amount of major developments relative to other neighborhoods and is the 11th highest in Manhattan. It had 2.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 13 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of five of the 23 commercial properties representing 275,215 square feet of the 1,121,454 square feet. The largest owner is Sabet Group, followed by McSam Hotel Group and then Kenneth Lee.
On the tax block, there were two new building construction projects totaling 209,617 square feet. The largest is a N/A-unit, 140,834-square-foot B building developed by Michael Kirchmann with plans filed August 7, 2018 and permitted February 13, 2019. The second largest is a 182-unit, 68,783-square-foot R-1 building developed by Sam Chang with plans filed February 11, 2014 and permitted January 11, 2019.

The majority, or 65 percent of the 1.1 million square feet of built space are office buildings, with hotel buildings next occupying 32 percent of the space.

The borrower

The PincusCo database currently indicates that Gds Development owned at least two commercial properties in New York City with 177,271 square feet and a city-determined market value of $37.9 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 51 percent of the 177,271 square feet of built space are D4 properties, with office properties next occupying 49 percent of the space. They are all located in Manhattan.

Correction: An earlier version of this post put the property in Penn Plaza, an adjacent neighborhood.

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