Lonicera signs $134M construction loan with Santander, City National for 314-unit project in Downtown Brooklyn

Lonicera Partners through the entity Hanover Tower Owner LLC as borrower signed a new construction loan with lender Santander Bank and City National Bank valued at $134 million for the 314-unit development project at 15 Hanover Place in Downtown Brooklyn.
The deal closed on July 18, 2022 and was recorded on August 1, 2022. The two parcels have 41,720 square feet of built space and 77,080 square feet of additional air rights for a total buildable of 118,800 square feet according to PincusCo analysis of city data. The loan price per built square foot is $3,211 and the price per buildable square foot is $1,127 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 signatory for Lonicera Partners was Jamie R. Anthony. The Commercial Observer reported that City National Bank was also a co-lender, and that Gideon Gil, Zachary Kraft and Sebastian Sanchez of Cushman & Wakefield arranged the debt.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 15 Hanover Place.

Prior sales and revenue

Out of the two properties, one with a total of 41,720 square feet of built space generated revenue of $172,494 per year.

The property

The 15 Hanover Place parcel has frontage of 84 feet and is 100 feet deep with a total lot size of 9,380 square feet. The lot is irregular. 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 $4.9 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have received $10,000 in ECB penalties and $11,500 in OATH penalties in the last year.

Development

On these lots, there is one active new building construction project for a 314-unit, 299,406-square-foot R-2 building. The project was developed by Lonicera Partners, John Evans filed the plans on September 21, 2021 and it has not been permitted yet.

The neighborhood

In Downtown Brooklyn, the bulk, or 40 percent of the 24.3 million square feet of commercial built space are office buildings, with elevator buildings next occupying 25 percent of the space. In sales, Downtown Brooklyn has 2.8 times the average sales volume among other neighborhoods with $946.2 million in sales volume in the last two years and is the 4th highest in Brooklyn. For development, Downtown Brooklyn has 2.2 times the average amount of major developments relative to other neighborhoods and is the 7th highest in Brooklyn. It had 2.3 million square feet of commercial and multi-family construction under development in the last two years, which represents 9 percent of the neighborhood’s built space.

The block

On the tax block of 15 Hanover Place, PincusCo has identified the owners of nine of the 21 commercial properties representing 570,743 square feet of the 746,588 square feet. The largest owner is Jenel Management, followed by Lonicera Partners and then Saied Shamash. There are six active new building construction projects totaling 922,975 square feet. The largest is a 37-unit, 37,733-square-foot R-2 building developed by Izzy Neiman with plans filed August 21, 2014 and it has not been permitted yet.The second largest is a 184-unit, 162,053-square-foot R-2 building developed by Izzy Neiman with plans filed April 23, 2014 and permitted May 10, 2018.

The majority, or 57 percent of the 582,822 square feet of built space are elevator buildings, with mixed-use buildings next occupying 16 percent of the space.

The borrower

The PincusCo database currently indicates that Lonicera Partners owned at least 77 commercial properties in New York City with 313,380 square feet and a city-determined market value of $29.3 million. (Market value is typically about 50% of actual value.) The portfolio has $5.1 million in debt, borrowed from W Financial. Within the portfolio, the bulk, or 60 percent of the 313,380 square feet of built space are elevator properties, with office properties next occupying 21 percent of the space. The bulk, or 98 percent of the built space, is in Brooklyn, with Queens next at 2 percent of the space.

Direct link to Acris document. link