Korman Communities refis two hotels in Midtown West with $92.5M

Korman Communities signed $92.5 million in refinance loans with Capital One for two hotels in Midtown West in two separate transactions.

In the larger, Korman Communities through the entity Metropolitan 58th Street Associates, LLC as borrower signed a refi loan with lender Capital One valued at $54.8 million for the 134-unit hotel building (HS) at 42 West 58th Street in Midtown West, Manhattan.
The deal closed on April 7, 2023 and was recorded on April 19, 2023. The prior lender was CIBC which held debt that had an original loan amount of $68 million. The property has 122,889 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $445 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 owner bought the property on January 12, 2006, for $90 million. The signatory for Korman Communities was Bradley J. Korman. The signatory for Capital One was Stephen Klufas.

In the second, Korman Communities through the entity Metropolitan Times Square Associates LLC as borrower signed a refi loan with lender Capital One valued at $37.7 million for the 106-unit hotel building (HS) at 123 West 44th Street in Midtown West, Manhattan. The deal closed on April 7, 2023 and was recorded on April 19, 2023. The prior lender was CIBC which held debt that had an original loan amount of $57 million.The property has 115,355 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $326 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 owner bought the property on January 19, 2007, for $82 million. The signatory for Korman Communities was Bradley J. Korman. The signatory for Capital One was Stephen Klufas.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Bradley Korman, head officer and Jennifer Doherty, site manager. The business entity is Metropolitan 58th Street Associates Llc.

The property

The hotel building with 134 residential units in Midtown West has 122,889 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 100 feet and is 100 feet deep with a total lot size of 10,041 square feet. The zoning is C5-2.5 which allows for up to 12 times floor area ratio (FAR) for commercial The city-designated market value for the property in 2022 is $24.1 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received $2,360 in OATH penalties in the last year.

The neighborhood

In Midtown West, The majority, or 75 percent of the 75.9 million square feet of commercial built space are office buildings, with hotel buildings next occupying 14 percent of the space. In sales, Midtown West has the 5th highest sale turnover among other neighborhoods in the city with $2.3 billion in sales volume in the last two years. For development, Midtown West is the 2nd most active neighborhood among other neighborhoods. It had 15.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 21 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other hotel buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of seven of the 17 commercial properties representing 2,114,842 square feet of the 2,531,170 square feet. The largest owner is Vornado Realty Trust, followed by Solow Realty & Development and then Solow Building Company.
On the tax block, there was one new building construction project filed totaling 36,423 square feet. It is a 15-unit, 36,423 square-foot residential (R-2) building submitted by Solow Realty & Development and filed by Anthony Calicchio with plans filed December 30, 2016 and permitted January 24, 2018.

The majority, or 80 percent of the 2.5 million square feet of built space are office buildings, with hotel buildings next occupying 9 percent of the space.

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