Icon Realty signs loan extension for $172M securitized debt on 21-building Manhattan portfolio

Icon Realty Management through the entity 320-324 West 14 Realty Associates LLC and others as borrower signed a loan extension with lender Series 2019-Icon valued at $172 million for 21 properties in Manhattan with a total of 381 units and 220,951 square feet of total space. The properties include the 19-unit residential walkup building (C4) at 322 West 14th Street in West Village, Manhattan, seven-unit residential walkup building (C4) at 320 West 14th Street in West Village, Manhattan, and eight-unit residential walkup building (C7) at 324 West 14th Street in West Village, Manhattan.
The deal closed on January 1, 2024 and was recorded on June 12, 2024. The loan price per built square foot is $778.
The signatory for Icon Realty Management was Terrence Lowenberg and Todd Cohen. The signatory for Series 2019-Icon was Robert Records.

The parties agreed to extend the maturity date from January 1, 2024, to January 1, 2025, with an option to extend it for one more year. The original securitization covered 18 loans with an aggregate principal of $174.7 million. This extension covers 17 of those loans totaling $172.03 million because Icon sold the smallest property in the pool by loan value, 413 South Fifth Street, to Carlyle Group and Greenbrook Partners in September 2023.

The loan is in care of SitusAMC, as special servicer for the loan. The agreement was dated May 14 but was effective as of the original maturity date of January 1.

The additional properties are 448 West 19th Street and 446 West 19th Street, 57-59 2nd Avenue, 43 West 27th Street, 59-61 East 3rd Street, 1384 1st Avenue, 808 Lexington Avenue, 329 Union Street, 350 East 13th Street, 358 11th Street and 362 11th Street, 610 East 9th Street, 316 West 14th Street, 402 East 12th Street, 42 Sidney Place, 522 East 5th Street, 106 Bedford Avenue and 295 Degraw Street.

According to a Morningstar report from April 2023, “The trust is secured by 18 separate nonrecourse, first-lien mortgage loans totaling $174.7 million, including 10 multifamily properties and eight mixed-use properties with 352 residential and 17 commercial units in Manhattan and Brooklyn, New York. The sponsor gradually acquired the 18-property portfolio at a total cost of $160.5 million and invested an additional $55.6 million in capital improvements for a total cost basis of $216.0 million at the time of loan closing. The properties have potential for additional revenue bumps if rent-restricted units are legally vacated and converted into market-rate units. The loans, which are not cross-collateralized or cross-defaulted, all have five-year, interest-only (IO) loan terms and are scheduled to mature in January 2024. Each borrower is a special-purpose entity sponsored by Icon Realty Management, LLC, a real estate investment and management firm headquartered in New York.

“As of April 2023, there are 11 loans, representing 58.4% of the current trust, on the servicer’s watchlist mainly because of low debt service coverage ratios (DSCR) and the initiation of cash traps. Many of the loans being monitored for low DSCR were initially added in 2020 or 2021 and have since reported improvements in performance. The weighted-average net-cash-flow improvement for loans on the servicer’s watchlist was 17.6% from YE2021. For the portfolio as a whole, financial reporting for the trailing 12 months ended September 30, 2022, indicates the combined portfolio cash flow increased 10.2% over the YE2021 figures to $10.4 million, which is relatively in line with the DBRS Morningstar net cash flow of $10.8 million. As of September 2022, the portfolio’s weighted average occupancy was 90.7%, compared with 96.3% at YE2021 and 78.9% at YE2020, with individual property occupancies ranging from 55.0% to 100.0%. A-note DSCRs remain healthy, with the portfolio reporting a weighted average A-note DSCR of 2.17 times (x). DBRS Morningstar anticipates the portfolio will continue to perform in line with issuance expectations through to its maturity in 2024. ”

Prospectus

The block

On the tax block of 320 West 14th Street, PincusCo has identified the owners of nine of the 17 commercial properties representing 132,712 square feet of the 293,436 square feet. The largest owner is S.W. Management, followed by Rwn Real Estate Partners and then Icon Realty Management.
There are no active new building construction projects on this tax block.

The majority, or 37 percent of the 293,436 square feet of built space are walkup buildings, with elevator buildings next occupying 22 percent of the space.

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