Lender TPG Real Estate acquires East Harlem office from Savanna at $56.2M transfer value

Lender TPG Real Estate Partners through the entity 1825 Park Avenue Acquisition Co., LLC acquired from borrower Savanna through the entity 1825 Park Avenue Property Investors III, LLC, the office building (O6) at 1825 Park Avenue in East Harlem, Manhattan with a $56.2 million transfer value.
The transfer closed on December 15, 2023 and was recorded on December 18, 2023. The property has 112,500 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $499 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.)
Savanna bought the property on December 22, 2015, for $48 million. The signatory for Savanna was Nicholas Bienstock. The signatory for TPG Real Estate Partners was Matthew Coleman. The contract date was December 15, 2023. Savanna in this transaction turned over the property to its lender, TPG. Savanna borrowed $54 million from TPG in January 2019. Savanna listed the property in 2021, seeking $75 million.

The loan remains active, according to the transfer document.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer TPG Real Estate Partners had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Savanna had not purchased any other properties and had not sold any properties over the same time period. The 112,500-square-foot property generated revenue of $6.4 million or $57 per square foot, according to the most recent income and expense figures.

The property

The office building in East Harlem has 112,500 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 90 feet and is 99 feet deep with a total lot size of 8,993 square feet. The zoning is C6-4 which allows for up to 10 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $26.4 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 DOB violation 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 East Harlem, The majority, or 51 percent of the 52.3 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 21 percent of the space. In sales, East Harlem has 1.9 times the average sales volume among other neighborhoods with $655.4 million in sales volume in the last two years and is the 20th highest in Manhattan. For development, East Harlem has 1.9 times the average amount of major developments relative to other neighborhoods and is the 16th highest in Manhattan. It had 1.9 million square feet of commercial and multi-family construction under development in the last two years, which represents 4 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of four of the 12 commercial properties representing 173,727 square feet of the 638,419 square feet. The largest owner is Thor Equities, followed by Edward Ostad and then Bldg Management.
On the tax block, there was one new building construction project filed totaling 154,346 square feet. It is a 211-unit, 154,346 square-foot residential (R-2) building submitted by Jorge Diaz with plans filed December 18, 2015 and permitted August 31, 2017.

The majority, or 55 percent of the 638,419 square feet of built space are elevator buildings, with office buildings next occupying 34 percent of the space.

The seller

The PincusCo database currently indicates that Savanna owned at least 10 commercial properties in New York City with 2,202,860 square feet and a city-determined market value of $484.8 million. (Market value is typically about 50% of actual value.) The portfolio has $766.4 million in debt, with top three lenders as Deutsche Pfandbriefbank, PIMCO, and Aareal Capital respectively. Within the portfolio, the bulk, or 85 percent of the 2,202,860 square feet of built space are office properties, with O4 properties next occupying 15 percent of the space. The bulk, or 70 percent of the built space, is in Manhattan, with Brooklyn next at 30 percent of the space.

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