Magna Hospitality Group signs $101.5M refi with Apollo’s Athene for hotel in Chelsea

Magna Hospitality Group through the entity Ny 24th Street Operating VI LLC as borrower signed a refi loan with lender Apollo Global Management through the entity Athene Annuity And Life Company valued at $101.5 million for the hotel building (H2) at 140-142 West 24th Street in Chelsea, Manhattan.
The deal closed on October 28, 2022 and was recorded on November 9, 2022. The prior lender was M&T Bank which held debt that had an original loan amount of $135 million. The property has 172,767 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $587 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 December 28, 2018, for $112.6 million. The signatory for Magna Hospitality Group was Douglas C. Stevens. The signatory for Apollo Global Management was Jeffrey Horowitz.

The property

The 140-142 West 24th Street parcel has frontage of 75 feet and is 98 feet deep with a total lot size of 7,406 square feet. The zoning is M1-6 which allows for up to 10 times floor area ratio (FAR) for manufacturing. The city-designated market value for the property in 2022 is $80.1 million.

Violations and lawsuits

The property was involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $1.5 million suit concerning a mechanic’s lien filed on May 27, 2021, by Prime Mix Corp. against Magna Hospitality Group. In addition, according to city public data, the property has received $2,670 in OATH penalties in the last year.

Development

On the lot, there is one active new building construction project for a 510-unit, 140,548 square-foot R-1 building. The project was developed by Sam Chang with plans filed September 6, 2017 and permitted June 22, 2018.

The neighborhood

In Chelsea, the bulk, or 35 percent of the 52.5 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 3rd highest sale turnover among other neighborhoods in the city with $2.6 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 13th highest in Manhattan. It had 2.1 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 10 of the 27 commercial properties representing 509,077 square feet of the 815,936 square feet. The largest owner is Magna Hospitality Group, followed by Mack Real Estate Group and then Stellar Management.
On the tax block, there were three new building construction projects totaling 601,596 square feet. The largest is a 32-unit, 249,045-square-foot B building developed by Jeffrey Dagowitz with plans filed October 28, 2014 and it has not been permitted yet.The second largest is a 21-unit, 212,003-square-foot R-2 building developed by Annette Fisherman with plans filed September 19, 2014 and it has not been permitted yet.

The majority, or 32 percent of the 804,267 square feet of built space are hotel buildings, with office buildings next occupying 29 percent of the space.

The borrower

The PincusCo database currently indicates that Magna Hospitality Group owned at least eight commercial properties in New York City with 1,204,571 square feet and a city-determined market value of $421.6 million. (Market value is typically about 50% of actual value.) The portfolio has $635.9 million in debt, with top three lenders as PIMCO, Blackstone Group, and Starwood Capital Group respectively. Within the portfolio, all identified are hotel properties. They are all located in Manhattan.

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