Kinsmen Property Group signs $25.4M loan with TD Bank for five properties in East Village

Kinsmen Property Group through the entity 62-64 Third Ave L.P as borrower signed an acquisition loan with lender TD Bank through the entity Td Bank, N.A valued at $25.4 million for five properties including the 10-unit residential walkup building at 64 3rd Avenue in East Village, Manhattan, midblock three-unit mixed-use building at 58 3rd Avenue in East Village, Manhattan, and midblock three-unit mixed-use building at 60 3rd Avenue in East Village, Manhattan.
The deal closed on January 26, 2021 and was recorded on March 7, 2022. The prior lender was Investors Bank which held debt that had an original loan amount of $3.9 million.The five properties have 32,039 square feet of built space and 43,960 square feet of additional air rights for a total buildable of 75,984 square feet according to PincusCo analysis of city data. The loan price per built square foot is $792 and the price per buildable square foot is $334 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 Kinsmen Property Group was Ari Zagdanski. The signatory for TD Bank was Brian J. Terry.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 64 3rd Avenue.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Ari Zagdanski, head officer and Peter Lehr, officer. The business entities are Kaled Management Corp. and 64 Third Avenue Associates Llc. The five properties with a total of 32,039 square feet of built space generated revenue of $2.4 million per year or $76 per square foot.

The property

The 64 3rd Avenue parcel has frontage of 23 feet and is 100 feet deep with a total lot size of 3,935 square feet. The lot is irregular. The zoning is C6-2A which allows for up to 6 times floor area ratio (FAR) for commercial and up to 6.02 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $5 million.

Violations and lawsuits

The properties were not involved in any lawsuits or bankruptcies in the past years. In addition, according to city public data, the properties have received $131,250 in ECB penalties and $141,275 in OATH penalties in the last year.

Development

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 East Village, the bulk, or 35 percent of the 19.3 million square feet of built space are residential walkup buildings, with residential elevator buildings next occupying 27 percent of the space. In sales, East Village has 2.1 times the average sales volume among other neighborhoods with $593.6 million in sales volume in the last two years and is the 21st highest in Manhattan. For development, East Village has had very little major development activity relative to other neighborhoods.It had 152,634 square feet of commercial and multi-family construction under development in the last two years, which represents 0.79 percent of the neighborhood’s built space. There were two pre-foreclosure suit filed among other residential walkup buildings in the past 12 months.

The block

On the tax block of 64 3rd Avenue, PincusCo has identified the owners of 10 of the 26 commercial properties representing 379,171 square feet of the 1,127,795 square feet. The largest owner is Lightstone Group, followed by New York University and then Mallory Management. There are no active new building construction projects on this tax block.

The majority, or 37 percent of the 873,355 square feet of built space are residential elevator buildings, with hotel buildings next occupying 33 percent of the space.

The borrower

The PincusCo database currently indicates that Kinsmen Property Group owned at least three commercial properties with 17,634 square feet and a city-determined market value of $11.7 million. (Market value is typically about 50% of actual value.) Within the portfolio, all identified are mixed-use properties. They are all located in Manhattan.

Surrounding

Within a 400-foot radius of 64 3rd Avenue, Pincusco identified 10 commercial real estate items of interests occurred over the past 24 months.
Of those 10 items, five were sales above $5 million totaling $50.1 million. The most recent of the five was Kinsmen Property Group which bought the 6,308-square-foot, four-unit mixed-use building (S3) on 58 3rd Avenue for $10 million from George Nanas on February 9, 2022.
Of those 10 items, five were loans above $5 million totaling $275.3 million. The most recent of the five was 111 Fourth Avenue cooperative which borrowed $15 million from Morgan Stanley secured by the 156,650-square-foot, 177-unit co-op (D4) on 111 4th Avenue on February 1, 2021.

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