Korean firm Eugene funds $266M purchase from Related with $173M Wells Fargo loan

Eugene Asset Management through the entity Lyric Property Owner LLC paid $266 million to Related Companies through the entity Related Broadway Development, L.L.C. for the 285-unit property the Lyric at 2527 Broadway in the Upper West Side of Manhattan, as PincusCo first reported last month. That acquisition was financed with a $172.9 million loan from Wells Fargo. The sale was for a majority interest in the property, and Related retained a small stake and will continue to manage the property.
Eugene Asset Management and Related Companies through the entity Lyric Property Owner LLC as borrower signed an acquisition loan with lender Wells Fargo valued at $172.9 million.
The deal closed on April 20, 2022 and was recorded on May 9, 2022. The prior lender was Fannie Mae which held debt that had an original loan amount of $91 million.

The signatory for  Related Companies and Eugene was Related executive David Zussman. PincusCo first reported that Eugene Asset Management purchased the 285-unit Lyric from Related Companies last month, but did not have the loan price. Ryan Jang, an executive at Eugene, was identified as the “attention to” at Eugene in one of the recorded documents. The sale was brokered by a Cushman & Wakefield team led by Doug Harmon and Adam Spies.

Prior sales and revenue

Prior to this transaction, Pincusco has no record that the buyer Eugene Asset Management had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Related Companies purchased 10 properties in three transactions for a total of $510.7 million and sold 23 properties in 17 transactions for a total of $916.5 million over the same time period. The Lyric with a total of 376,500 square feet of built space generated revenue of $16.9 million per year or $45 per square foot.

The property

The 2527 Broadway parcel has a total lot size of 307,500 square feet. The property has a 421A exemption that started in 2003 and expires in 2023. The city-designated market value for the property in 2022 is $62.4 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have received one DOB violation, $4,900 in ECB penalties, and $14,600 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 block

On the tax block of 2527 Broadway, PincusCo has identified the owners of three of the 17 commercial properties representing 263,663 square feet of the 551,545 square feet. The largest owner is Empire Hotel Group, followed by Brusco Group and then Lightstone Group. There is one active new building construction project totaling 75,003 square feet. It is a 36-unit, 75,003-square-foot R-2 building developed by Meir Bouskila with plans filed July 29, 2015 and permitted September 20, 2018.

The majority, or 38 percent of the 688,786 square feet of built space are residential elevator buildings, with hotel buildings next occupying 35 percent of the space.

The seller

The PincusCo database currently indicates that Related Companies owned at least 166 commercial properties with 19,476,407 square feet and a city-determined market value of $4.3 billion. (Market value is typically about 50% of actual value.) The portfolio has $4.2 billion in debt, with top three lenders as Wells Fargo, Carlyle Group, and Bank of America respectively. Within the portfolio, the bulk, or 40 percent of the 19,476,407 square feet of built space are residential elevator properties, with office properties next occupying 33 percent of the space. The bulk, or 57 percent of the built space, is in Manhattan, with Bronx next at 26 percent of the space.

Surrounding

Within a 400-foot radius of 2527 Broadway, PincusCo identified six commercial real estate items of interests occurred over the past 24 months.
Of those six items, one was in new building development. It was a new building permit issued on November 18, 2020 for a 232,290-square-foot R-2 building with 130 residential units at 2555 Broadway.
One of those six items was a sale which Lightstone Group bought the 55,840-square-foot, 65-unit rental (D3) on 700 West End Avenue for $28.5 million from Sofia Einy on September 20, 2021.
Of those six items, four were loans above $5 million totaling $200.7 million. The most recent of the four was Lightstone Group which borrowed $25.9 million from Aflac secured by the 55,840-square-foot, 65-unit rental (D3) on 700 West End Avenue on October 29, 2021.

Direct link to Acris document. link