Korman signs $48M refi loan with MF1 Capital for AKA Sutton Place hotel

Korman Communities through the entity Metropolitan Sutton Associates LLC as borrower signed a refi loan with lender MF1 Capital valued at $48 million for the 76-unit hotel building (HS) at 330 East 56th Street in Sutton Place, Manhattan known as the AKA Sutton Place. This property targets long-term hotel stays.
The deal closed on April 25, 2023 and was recorded on May 3, 2023. The prior lender was Webster Bank which held debt that had an original loan amount of $50 million. The property has 186,000 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $258 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 September 14, 2006, for $83.5 million. The signatory for Korman Communities was Bradley J. Korman. The signatory for MF1 Capital was Jonathan Pfeil.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development include Bradley Korman, head officer and Scott Relick, officer. The business entity is Metropolitan Sutton Associates/Aka Sutton Place.

The property

The hotel building with 76 residential units in Sutton Place has 186,000 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 79 feet and is 100 feet deep with a total lot size of 7,932 square feet. The zoning is R8 which allows for up to 6.02 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $24.5 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 one housing violation and $50 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 $1 million on this tax lot.

The neighborhood

In Sutton Place, The majority, or 70 percent of the 5.2 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 8 percent of the space. In sales, Sutton Place has the 44th highest sale turnover among other neighborhoods in Manhattan with $19.9 million in sales volume in the last two years. For development, Sutton Place has had very little major development activity relative to other neighborhoods.It had 34,430 square feet of commercial and multi-family construction under development in the last two years, which represents 0.66 percent of the neighborhood’s built space.

The block

There are no active new building construction projects on this tax block.

The majority, or 50 percent of the 1.2 million square feet of built space are elevator buildings, with specialty buildings next occupying 35 percent of the space.

The borrower

The PincusCo database currently indicates that Korman Communities owned at least two commercial properties with 240 residential units in New York City with 238,244 square feet and a city-determined market value of $46.3 million. (Market value is typically about 50% of actual value.) The portfolio has $92.5 million in debt, borrowed from Capital One. Within the portfolio, all identified are hotel properties. They are all located in Manhattan.

Direct link to Acris document. link