Kano Real Estate signs $26.5M refi with JPMorgan Chase in SoHo on Broadway

The Shemel family’s Kano Real Estate Investors through the entity Broadway 558 Realty Alpha LLC as borrower signed a refi loan with lender JPMorgan Chase valued at $26.5 million for the mixed-use building (K2) at 558 Broadway in SoHo, Manhattan. The building is home to the experiential retailer Museum of Ice Cream. The building also fronts on Crosby Street.
The deal closed on December 23, 2022 and was recorded on February 23, 2023. The prior lender was SunTrust Bank which held debt that had an original loan amount of $26 million. The property has 22,916 square feet of built space and 17,012 square feet of additional air rights for a total buildable of 39,935 square feet according to PincusCo analysis of city data. The loan price per built square foot is $1,156 and the price per buildable square foot is $663 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 Kano Real Estate Investors was Sabah Shemel. The signatory for JPMorgan Chase was Michael Feldman. Kano Real Estate is controlled by Noam and Sabah Shemel.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes David Shemel, head officer and David Zebli, officer. The business entities are Broadway 558 Realty Llc and Broadway 558 Realty Llc. The 22,916-square-foot property generated revenue of $2.6 million or $111 per square foot, according to the most recent income and expense figures.

The property

The 558 Broadway parcel has frontage of 27 feet and is 199 feet deep with a total lot size of 7,987 square feet. The lot is irregular. The zoning is M1-5B which allows for up to 5 times floor area ratio (FAR) for manufacturing The property is in the SoHo-Cast Iron Historic District. The city-designated market value for the property in 2022 is $14.8 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 $9,490 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on August 24, 2018. 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 SoHo, the bulk, or 46 percent of the 9.4 million square feet of commercial built space are office buildings, with mixed-use buildings next occupying 15 percent of the space. In sales, SoHo has 2 times the average sales volume among other neighborhoods with $699.5 million in sales volume in the last two years and is the 21st highest in Manhattan. For development, SoHo has had very little major development activity relative to other neighborhoods.It had 389,037 square feet of commercial and multi-family construction under development in the last two years, which represents 4 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of five of the 10 commercial properties representing 300,631 square feet of the 546,137 square feet. The largest owner is Meadow Partners, followed by Acadia Realty Trust and then Kano Real Estate Investors.
There are no active new building construction projects on this tax block.

The majority, or 61 percent of the 519,968 square feet of built space are office buildings, with retail buildings next occupying 20 percent of the space.

The borrower

The PincusCo database currently indicates that Kano Real Estate Investors owned at least 18 commercial properties in New York City with 151,737 square feet and a city-determined market value of $76.1 million. (Market value is typically about 50% of actual value.) The portfolio has $43.6 million in debt, borrowed from Israel Discount Bank. Within the portfolio, the bulk, or 52 percent of the 151,737 square feet of built space are walkup properties, with mixed-use properties next occupying 21 percent of the space. They are all located in Manhattan.

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