GFP Real Estate signs $87M refi loan with Apple Bank for office in Garment District

GFP Real Estate through the entity 38th And 8th LLC as borrower signed a refi loan with lender Apple Bank for Savings valued at $87 million for the office building at 520 8th Avenue in Garment District, Manhattan.
The deal closed on April 11, 2022 and was recorded on May 3, 2022. The prior lender was COMM 2012-CCRE2 which held debt that had an original loan amount of $105 million. The property has 754,487 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $115 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 GFP Real Estate was Jeffrey Gural and Edward J. Hart. The signatory for Apple Bank for Savings was Cynthia Wang.

Prior sales and revenue

The 754,487-square-foot property generated revenue of $25.9 million or $34 per square foot, according to the most recent income and expense figures.

The property

The 520 8th Avenue parcel has frontage of 197 feet and is 201 feet deep with a total lot size of 39,780 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 $113.2 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 four DOB violations, $1,250 in ECB penalties, and $4,350 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on September 5, 2012. 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 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 five of the 15 commercial properties representing 1,266,016 square feet of the 2,386,056 square feet. The largest owner is George Comfort & Sons, followed by Brickman and then Sioni Group. There are no active new building construction projects on this tax block.

The majority, or 91 percent of the 2.5 million square feet of built space are office buildings, with residential elevator buildings next occupying 7 percent of the space.

The borrower

The PincusCo database, which is incomplete, currently indicates that GFP Real Estate owned at least five commercial properties with 1,054,768 square feet and a city-determined market value of $248.9 million. (Market value is typically about 50% of actual value.) The portfolio has $260.9 million in debt, with top three lenders as CTL Capital, Capital One, and JPMorgan Chase respectively. Within the portfolio, the bulk, or 97 percent of the 1,054,768 square feet of built space are office properties, with retail properties next occupying 3 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 520 8th Avenue, PincusCo identified six commercial real estate items of interests occurred over the past 24 months.
One of those six items was a sale which NY 8th Ave Investor LLC bought the 98,674-square-foot, 320-unit hotel (H2) on 523 8th Avenue for $47.4 million from McSam Hotel Group on June 25, 2021.
Of those six items, five were loans above $5 million totaling $210 million. The most recent of the five was Faraj Srour which borrowed $45.1 million from New York Community Bank secured by the 112,578-square-foot, 15-unit office building (O6) on 255 West 36th Street on March 21, 2022.

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