Lexin Capital pays down Chelsea office debt with new investors, equity now $35.1M

Lexin Capital with a $19 million equity infusion from new investors, paid off a 2016 loan that had an original principal of $73 million secured by the Chelsea office building at 229 West 28th Street. The new value of the equity was $35.1 million. It was unclear if that was the total revised value of the asset or just the value of equity with an unknown amount of debt. There is no new debt recorded on the property. Lexin Capital, led by Metin Negrin, remains the general partner of the deal. The identity of the new investors was not disclosed.

In the transaction, Lexin Capital through the entity Lexin Caxton LLC acquired from Lexin Capital through the entity Lexin Ny 229 LLC for the office building (O6) at 229 West 28th Street in Chelsea, Manhattan, with the total value $35.1 million.
The deal closed on January 18, 2024 and was recorded on January 31, 2024. The property has 156,500 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $224 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 seller bought the property on March 3, 2014, for $81.5 million. The signatory for Lexin Capital was Metin Negrin. The contract date was December 22, 2023.

This is a sale of a 54% stake in the building, with taxes paid on $19 million (which is 54 percent of $35.1 million). Lexin offered the property for sale in 2020, seeking $140 million. The Real Deal reported at that time that high-net worth individual investors were involved in the original 2014 deal.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Lexin Capital had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Lexin Capital had not purchased any other properties and had not sold any properties over the same time period.

The property

The office building in Chelsea has 156,500 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 124 feet and is 98 feet deep with a total lot size of 12,134 square feet. The lot is irregular. The zoning is M1-6D which allows for up to 10 times floor area ratio (FAR) for manufacturing. The city-designated market value for the property in 2022 is $44.5 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 DOB violation, $2,500 in ECB penalties, and $2,500 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on June 19, 2014. 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 Chelsea, The bulk, or 36 percent of the 52.4 million square feet of commercial built space are office buildings, with elevator buildings next occupying 28 percent of the space. In sales, Chelsea has the 9th highest sale turnover among other neighborhoods in the city with $1.3 billion in sales volume in the last two years. For development, Chelsea has 2 times the average amount of major developments relative to other neighborhoods and is the 16th highest in Manhattan. It had 2 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 seven of the 21 commercial properties representing 807,426 square feet of the 1,660,370 square feet. The largest owner is Walter & Samuels, followed by Paul Kopatsis and then Ksl Capital Partners.
On the tax block, there were five new building construction projects totaling 1,139,243 square feet. The largest is a 480-unit, 351,185 square-foot residential (R-2) building submitted by MAG Partners and filed by Susi Yu with plans filed September 16, 2019 and permitted May 18, 2021. The second largest is a 323-unit, 258,285 square-foot residential (R-2) building submitted by Edison Properties and filed by Gary Dorin with plans filed December 2, 2014 and permitted April 16, 2015.

The majority, or 47 percent of the 1.7 million square feet of built space are office buildings, with elevator buildings next occupying 44 percent of the space.

The seller

The PincusCo database currently indicates that Lexin Capital owned at least two commercial properties in New York City with 198,992 square feet and a city-determined market value of $78.7 million. (Market value is typically about 50% of actual value.) The portfolio has $125 million in debt, borrowed from Deutsche Pfandbriefbank and Metropolitan Commercial Bank. Within the portfolio, the bulk, or 63 percent of the 198,992 square feet of built space are office properties, with hotel properties next occupying 37 percent of the space. They are all located in Manhattan.

The buyer

The PincusCo database currently indicates that Lexin Capital owned at least two commercial properties in New York City with 198,992 square feet and a city-determined market value of $78.7 million. (Market value is typically about 50% of actual value.) The portfolio has $125 million in debt, borrowed from Deutsche Pfandbriefbank and Metropolitan Commercial Bank. Within the portfolio, the bulk, or 63 percent of the 198,992 square feet of built space are office properties, with hotel properties next occupying 37 percent of the space. They are all located in Manhattan.

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