KPG Funds signs $51M refi loan with Ladder Capital for retail, office in Soho

KPG Funds through the entity 446 Broadway Owner LLC as borrower signed a refi loan with lender Ladder Capital through the entity Ladder Capital Finance LLC valued at $51 million for the midblock retail and office building at 446 Broadway in Soho, Manhattan.
The deal closed on March 7, 2022 and was recorded on April 6, 2022. The prior lender was Barings which held debt that had an original loan amount of $45 million.

The property has 27,000 square feet of built space and 2,997 square feet of additional air rights for a total buildable of 29,975 square feet according to PincusCo analysis of city data. The loan price per built square foot is $1,888 and the price per buildable square foot is $1,701 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 August 16, 2018, for $46.8 million. The signatory for KPG Funds was Gregory Kraut. The signatory for Ladder Capital was David Traitel.

The property

The 446 Broadway parcel has frontage of 50 feet and is 120 feet deep with a total lot size of 5,995 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 $8.5 million.

Violations and lawsuits

The property was not involved in any lawsuits or bankruptcies in the past years. In addition, according to city public data, the property has received five DOB violations and $10,000 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 this tax block, PincusCo has identified the owners of three of the 12 commercial properties representing 95,499 square feet of the 233,869 square feet. The largest owner is Tokyo Trust Capital, followed by Intercontinental Real Estate and then United American Land. There are no active new building construction projects on this tax block.

The majority, or 51 percent of the 302,444 square feet of built space are office buildings, with residential elevator buildings next occupying 24 percent of the space.

The borrower

The PincusCo database, which is incomplete currently tracks two commercial properties owned by KPG Funds with 102,211 square feet and a city-determined market value of $61.2 million. (Market value is typically about 50% of actual value.) The portfolio has $75.6 million in debt, with top three lenders as BrightSpire Capital, Callodine Thorofare, and Ready Capital respectively. Within the portfolio, the bulk, or 54 percent of the 102,211 square feet of built space are retail properties, with specialty properties next occupying 46 percent of the space. They are all located in Manhattan.

Surrounding

Within a 400-foot radius of 446 Broadway, Pincusco identified 19 commercial real estate items of interests occurred over the past 24 months.
Of those 19 items, two were for major renovation including a certificate of occupancy change. They were two initial temporary certificate of occupancy issuances for projects that initially costed $995,000. The most recent of these two items was the temporary certificate of occupancy on October 1, 2020 for at 455 Broadway.
Of those 19 items, four were sales above $5 million totaling $147.3 million. The most recent of the four was RWN Management which bought the 9,350-square-foot, eight-unit mixed-use building (S9) on 147 Grand Street for $16.1 million from Empire Capital Holdings on December 22, 2021.
Of those 19 items, 13 were loans above $5 million totaling $370.3 million. The most recent of the 13 was RWN Management which borrowed $11 million from Signature Bank secured by the 9,350-square-foot, eight-unit mixed-use building (S9) on 147 Grand Street on December 22, 2021.

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