Joy Construction, MADDD sign $50M refi with Valley National Bank for hotel in Hell’s Kitchen

Joy Construction and MADDD Equities through the entity YYY Atlas 48 LLC as borrower signed a refi loan with lender Valley National Bank valued at $50 million for the 203-unit hotel building (H2) at 305 West 48th Street in Hell’s Kitchen, Manhattan.
The deal closed on January 19, 2023 and was recorded on January 31, 2023. The prior lender was Valley National Bank which held debt that had an original loan amount of $45 million. The property has 73,651 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $678 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 Joy Construction and MADDD Equities was Eli Weiss. The signatory for Valley National Bank was Victor Brown and Roger Rofe.

The property

The 305 West 48th Street parcel has frontage of 50 feet and is 75 feet deep with a total lot size of 4,700 square feet. The zoning is C6-4 which allows for up to 10 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $27.4 million.The most recent loan totaled $6 million and was provided by First Republic Bank on September 14, 2021.

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 one DOB violation and $3,405 in OATH penalties in the last year.

Development

On the lot, there was one new building construction project for a 203-unit, 58,557 square-foot R-1 building. The project was developed by David Schwartz with plans filed May 24, 2017 and permitted May 30, 2019.

The neighborhood

In Hell’s Kitchen, the bulk, or 39 percent of the 41.7 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 17 percent of the space. In sales, Hell’s Kitchen has 4 times the average sales volume among other neighborhoods with $1.4 billion in sales volume in the last two years and is the 9th highest in Manhattan. For development, Hell’s Kitchen has 3.7 times the average amount of major developments relative to other neighborhoods and is the 7th highest in Manhattan. It had 3.7 million square feet of commercial and multi-family construction under development in the last two years, which represents 9 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 19 of the 41 commercial properties representing 515,272 square feet of the 745,507 square feet. The largest owner is Sterling Holdings, followed by Joseph Franco and then Empire Hotel Group.
On the tax block, there was one new building construction project filed totaling 58,557 square feet. It is a 203-unit, 58,557-square-foot R-1 building developed by David Schwartz with plans filed May 24, 2017 and permitted January 4, 2018.

The majority, or 36 percent of the 745,507 square feet of built space are hotel buildings, with walkup buildings next occupying 36 percent of the space.

The borrower

The PincusCo database currently indicates that Maddd Equities owned at least 10 commercial properties in New York City with 323,703 square feet and a city-determined market value of $101.1 million. (Market value is typically about 50% of actual value.) The portfolio has $211.9 million in debt, with top three lenders as NYC Housing Development Corporation, Sterling National Bank, and Metropolitan Commercial Bank respectively. Within the portfolio, the bulk, or 65 percent of the 323,703 square feet of built space are specialty properties, with hotel properties next occupying 15 percent of the space. The bulk, or 57 percent of the built space, is in Bronx, with Manhattan next at 43 percent of the space.
The PincusCo database currently indicates that Joy Construction owned at least five commercial properties in New York City with 341,178 square feet and a city-determined market value of $97.8 million. (Market value is typically about 50% of actual value.) The portfolio has $127 million in debt, borrowed from Natixis and Bank Leumi. Within the portfolio, the bulk, or 52 percent of the 341,178 square feet of built space are elevator properties, with industrial properties next occupying 34 percent of the space. The bulk, or 66 percent of the built space, is in Manhattan, with Brooklyn next at 34 percent of the space.

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