Heatherwood Luxury Rentals signs $35M refi for 142-unit LIC rental, down from $48M

Heatherwood Luxury Rentals through the entity 1719 27st DE LLC as borrower signed a refi loan with lender Walker & Dunlop valued at $35 million for the 142-unit residential elevator building (D3) at 42-25 27th Street in Long Island City, Queens.
The deal closed on June 2, 2023 and was recorded on June 13, 2023. The prior lender was PNC Bank which held debt that had an original loan amount of $48 million.
The property has 137,771 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $254 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 Heatherwood Luxury Rentals was Douglas S. Patrick. The signatory for Walker & Dunlop was Natalie Wyatt.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Douglas Patrick, head officer and Hal Duman, site manager. The business entities are 1719 27th Street Llc and 1719 27 St Llc. The 137,771-square-foot property generated revenue of $6.2 million or $45 per square foot, according to the most recent income and expense figures.

The property

The residential elevator building with 142 residential units in Long Island City has 137,771 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 140 feet and is 100 feet deep with a total lot size of 9,500 square feet. The zoning is M1-6/R10 which allows for up to 10 times floor area ratio (FAR) for manufacturing and up to 10 times FAR for residential with inclusionary housing. The property has a 421A exemption that started in 2013 and expires in 2028. The city-designated market value for the property in 2022 is $29.6 million.

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 one DOB violation and four housing violations in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on February 20, 2013. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The block

On this tax block, PincusCo has identified the owners of four of the four commercial properties representing 637,296 square feet of the 637,296 square feet. The largest owner is John Kristian Rapp, followed by Heatherwood Luxury Rentals and then Gotham Realty.
On the tax block, there was one new building construction project filed totaling 398,072 square feet. It is a 450-unit, 398,072 square-foot residential (R-2) building submitted by Heatherwood Luxury Rentals and filed by Douglas Partrick with plans filed October 1, 2013 and permitted June 3, 2014.

The majority, or 96 percent of the 637,296 square feet of built space are elevator buildings, with mixed-use buildings next occupying 3 percent of the space.

The borrower

The PincusCo database currently indicates that Heatherwood Luxury Rentals owned at least five commercial properties with 883 residential units in New York City with 944,505 square feet and a city-determined market value of $214.1 million. (Market value is typically about 50% of actual value.) The portfolio has $64.9 million in debt, borrowed from PNC Bank and Walker & Dunlop. Within the portfolio, all identified are elevator properties. The bulk, or 65 percent of the built space, is in Queens, with Brooklyn next at 35 percent of the space.

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