Joy Construction signs $97M loan for 186-unit rental in Hudson Yards

Joy Construction through the entity West 35th Sbxlvi, LLC as borrower signed a loan with lender Natixis valued at $97 million for the 186-unit residential elevator building (D7) at 411-421 West 35th Street in Hudson Yards, Manhattan.
The deal closed on July 7, 2022 and was recorded on July 19, 2022. The property has 178,414 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $543 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 prior lender was KKR & Co. that provided an $86 million loan.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Moses Berkovics, head officer and Abe Freidman, site manager. The business entity is West 35th Sbxlvi, Llc. The 178,414-square-foot property generated revenue of $9.7 million or $54 per square foot, according to the most recent income and expense figures.

The property

The 411-421 West 35th Street parcel has frontage of 164 feet and is 208 feet deep with a total lot size of 22,467 square feet. The lot is irregular. The zoning is R8A which allows for up to 6.02 times floor area ratio (FAR) for residential with inclusionary housing. The property has a 421A exemption that started in 2020 and expires in 2030. The city-designated market value for the property in 2022 is $53.3 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 two DOB violations in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on February 7, 2018. On these lots, there is one active new building construction project for a 186-unit, 178,014-square-foot R-2 building. The project was developed by Amnon Shalhov of Joy Construction with plans filed November 4, 2013 and permitted May 13, 2015.

The block

On this tax block, PincusCo has identified the owners of six of the 24 commercial properties representing 64,374 square feet of the 395,409 square feet. The largest owner is Ae Sook Choi, followed by Gottesman family and then Sugar Hill Capital Partners.
There is one active new building construction project totaling 178,014 square feet. It is a 186-unit, 178,014-square-foot R-2 building developed by Amnon Shalhov with plans filed November 4, 2013 and permitted August 29, 2014.

the majority, or 70 percent of the 395,409 square feet of built space are elevator buildings, with walkup buildings next occupying 21 percent of the space.

Surrounding

Within a 400-foot radius of 411-421 West 35th Street, Pincusco identified four commercial real estate items of interests occurred over the past 24 months.
Of those four items, one was for major renovation including a certificate of occupancy change. It was a permit application filed on October 19, 2020 for the $1.2 million renovation of 14,842-square-foot R-2 building with nine residential units at 440 West 36th Street.
One of those four items was a sale which ZD Jasper Realty bought the 18,702-square-foot, two-unit industrial (E9) on 429 West 36th Street and two other properties for $51.7 million from Extell Development on March 25, 2022.
Of those four items, two were loans above $5 million totaling $42.1 million. The most recent of the two was ZD Jasper Realty which borrowed $35 million from BridgeCity Capital secured by the 18,702-square-foot, two-unit industrial (E9) on 429 West 36th Street and two other properties on March 25, 2022.

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